No. 1998.
003
Suncor Energy Inc. Oil Sands Millennium Project
B.A. Lang, Suncor Energy, Fort McMurray, Alberta, Canada
Abstract
Suncor Energy Oil Sands has set a path for continuous growth
from the current 85,000 barrels of crude oil per calendar day
(bbls/cd) to 105,000 bbls/cd by the end of 1998. Thereafter, a
Production Enhancement Project will bring the production up
to 130,000 bbls/cd by the end of 2001. Meanwhile, Project
Millennium will be executed; this will bring the production up
to 210,000 bbls/cd by 2002. All these production improve-
ments couldn't have taken place without technological
improvements. This paper will describe the development and
impact of technologies.
Great Canadian Oil Sands
In 1997, Suncor Energy Inc. celebrates the 30th anniversary of
its oil sands operation. When it became operational in 1967,
Great Canadian Oil Sands (as it was then called), was the
world's first commercially successful oil sands venture. Today,
Suncor is a leader in the development of technology required
to produce crude oil and other products from the vast Atha-
basca oil sands deposit. Suncor's oil sands plant currently pro-
duces 31 million barrels of oil annually and blends light sweet
and sour crude oil products to meet customer specification.
The company's total production represents an important con-
tribution to Canada's energy requirements.
Prepared to sustain its oil sands operation well into the 21st
century, Suncor has received regulatory approval to open a
new mine called Steepbank and is expanding its plant facili-
ties to reach an annual design capacity of 38.3 million barrels
of oil. Construction is under way, and the site will be gearing
up for production later in 1998.
Suncor's next initiative for oil sands growth is called
Project Millennium — a $2.2 billion expansion to provide the
infrastructure that will increase annual plant capacity to 76.6
million barrels (210,000 barrels per day) by 2002. At these
rates, Suncor anticipates its oil sands operation to continue
until 2026; however, resources remain for continuing produc-
tion well beyond this date.
The first stage of the proposed project is a $90 million anal-
ysis which will include definitive engineering and an environ-
mental impact assessment to determine the optimal means to
meet its production targets. The plans for Project Millennium
will be confirmed during this stage and submitted to Suncor
Board of Directors before project construction begins.
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While Project Millennium is being developed, Suncor will
continue to focus on its current oil sands operation and intends
to make adjustments that will allow production to increase
beyond its current plan of 105,000 barrels a day. This phase,
which will cost Suncor about $190 million, is expected to
increase production levels steadily from 105,000 barrels in
1999 to 130,000 barrels a day by the year 2001.
Suncor Energy Corporate Profile
Suncor Energy Inc. is a Canadian integrated oil and gas com-
pany engaged in exploration, production, refining, and mar-
keting of oil and gas and other energy products through three
principal operating groups.
• Oil Sands produces and markets custom-blended refinery
feedstocks and transportation fuels from its oil sands mine
and upgrading facility near Fort McMurray, Alberta, Can-
ada.
• Exploration and Production explores for, acquires,
develops, and produces oil and natural gas in Western Can-
ada and markets its production throughout North America.
• Sunoco refines and markets petroleum products and chem-
icals and operates a refinery in Sarnia, Ontario, Canada
along with a network of retail gasoline outlets throughout
the province.
Oil Sands
In 1967, Great Canadian Oil Sands (the predecessor of what is
now Suncor Energy, Oil Sands) began operation, pioneering
the world's first commercially successful oil sands mining and
upgrading facility. Located in Northern Alberta, the site is
among the five largest mining operations in Canada in terms
of the volume of material moved, and it contributes about four
percent of Canada's domestic oil supply (See Figure 1). Sun-
cor's oil sands business represents a growing source of oil for
Canada's future.
Throughout its history in the Fort McMurray region, Sun-
cor has implemented innovative and practical technologies to
develop the potential of the vast Athabasca oil sands deposit.
Amid engineering challenges, fluctuating oil markets, and
harsh winter conditions, the company has remained commit-
ted to the oil sands industry.
Producing Oil Form Oil Sands
In the Athabasca region of Alberta, the oil sands — a mixture
of sand, clay, water and hydrocarbons in the form of bitumen
— lie in seams of varying thickness and different depths. Oil
sand located near the surface can be mined using conventional
open pit mining processes and equipment.
At Suncor's oil sands operation, producing oil from oil sand
involves three key processes: mining the oil sand, extracting
the bitumen, and upgrading the bitumen to produce petroleum
products (See Figure 2 ). These processes are supported by
energy and utility services. The integrated plant is currently
capable of producing 85,000 barrels of oil per day; and it will
increase production to 105,000 barrels per day when the
Steepbank Mine and Fixed Plant Expansion modifications are
fully operational by 1999.
The process begins in the mine where the overburden
(muskeg, top soil and sub-surface soils) is removed and saved
for reclamation. The oil-rich sand is excavated by 58-cubic
yard shovels and hauled in 240-ton trucks to a sizing plant
where lumps of ore are crushed to a uniform size. Currently,
oil sand from the existing mine on the west side of the Atha-
basca River is moved by a conveyor system to the primary
extraction plant for further processing. When Steepbank Mine
is operational, ore from the east side of the river will be moved
in hydrotransport pipelines to the extraction plant; this pro-
vides an improvement in energy efficiency. Mined areas are
refilled with tailings sand and reclaimed using stockpiled
overburden and top soil to reestablish a landscape of equal
capability to that which existed prior to development.
In the extraction plant the bitumen is separated from the
sand using hot water and steam. The oil sand is currently pro-
cessed in rotating tumblers and the sand is separated from the
bitumen in large separation cells. When Steepbank Mine is
operational, the ore conditioning will be accomplished in the
hydrotransport process instead of the tumblers. The molasses-
like bitumen is diluted with naphtha for final cleaning and
then transported to the upgrader.
In upgrading, the diluent naphtha is recovered from bitu-
men by distillation in the diluent recovery units. Subjected to
high temperatures during upgrading, the bitumen breaks down
or “cracks” into different fractions: naphtha, kerosene and gas
oil. Suncor is currently constructing a vacuum distillation unit
as part of its Fixed Plant Expansion that will remove virgin
kerosene and gas oil from the bitumen before it enters the cok-
ers to produce a light sour crude oil (See Figure 3). In the sec-
ondary upgrading process, hydrogen is added to remove
sulphur and produce a light sweet crude oil. These crude oil
products are blended to meet customer requirements and are
sent by pipeline to markets across Canada and the United
States.
Supporting the operation is the on-site energy services
plant which uses coke (a by-product of the upgrading pro-
cess), coker gas and/or natural gas as fuel to generate steam
and electricity. The Fixed Plant Expansion project includes
systems to reduce the site's energy requirements by recovering
2
waste heat and using it to warm the plant's recycle water
which is used in the extraction process.
Suncor's Future
The demand for crude oil products in North America contin-
ues to increase. In its 1996 annual reserves report, the Alberta
Energy and Utilities Board reported that conventional crude
oil reserves are declining. Oil sands is a national resource and
may become the main source for Canada's long term fuel sup-
ply. Suncor is in a position to increase its oil sands production,
offsetting some of the reductions in conventional crude sup-
ply.
However, for the company's long-term economic viability,
Suncor must ensure its oil sands operation can compete with
North America's leading low-cost producers of conventional
crude oil. Suncor's efforts make this resource a valuable and
key part of Canada's economic success and energy self-suffi-
ciency.
Suncor has the proven technology, operation and manage-
ment expertise, and financial strength to intensify its commit-
ments to oil sands development and expand this core area of
its business. Expanding its oil sands business is a critical part
of Suncor's growth agenda.
Project Millennium
The proposed Project Millennium will increase the annual
design capacity of Suncor's oil sands facility to the 210,000
barrels per day level by 2002. The $2.2 billion cost of the
project includes the expansion of Steepbank Mine, modifica-
tions to existing plant facilities, and the construction of new
plant components. This includes a production enhancement
phase whereby Suncor expects that, by a change in plant pro-
cesses and the capacity of certain plant units, the integrated
plant production will be increased from 105,000 barrels a day
in 1999 to 130,000 barrels per day in mid-2001. This phase of
work is estimated at a cost of $190 million, which is included
in the $2.2 billion estimate for Project Millennium.
Many projects are being considered for future development
in the Athabasca oil sands region' and Suncor may consider
joint-venture arrangements that would enhance the industry's
development.
During the next year, Suncor will embark on a comprehen-
sive analysis of its plant; this will include engineering and
environmental studies to determine the best way to achieve its
production target. These studies will confirm the design basis
for Project Millennium; the following information represents
the results of Suncor's preliminary studies.
Mining
The selection of mining areas for the project was based on ore
body evaluations completed for the Steepbank Mine (See Fig-
ure 4). The proposed mine layout and plan also considered oil
sand transportation and extraction technologies.
Mining is proposed to continue on the east side of the Atha-
basca River, extending the Steepbank Mine pits to the east and
south. The expanded mining areas, an advancement of the
already conceived Steepbank Mine plans, will operate in tan-
dem with the Steepbank Mine pits as an integrated mining
operation. The expanded mine area will provide enough ore
for a 25-year mine life (to 2026) at the rate of 210,000 barrels
a day. Disposal of overburden and tailings wastes will also be
integrated with the Steepbank Mine operation.
The technologies and equipment for site preparation and
mining will be the same as planned for Steepbank Mine. Ore
will be reduced in size and mixed with hot water in the Ore
Preparation Plant utilizing rotary drum breakers. This breaker
technique is currently used in the coal mining industry in both
Alberta and British Columbia and has been successfully
adapted for oil sands.
The ore will exit the breaker process as a slurry of -2”
material and is then retained in storage tanks which contain an
agitator system designed to keep the material continually
moving. This agitator system successfully retains a homoge-
neous tars and slurry with -2” rock preparing it for transporta-
tion via hydrotransport to the Extraction Plant.
Steepbank Mine will be the first commercial use for both
the rotary breaker and slurry tank applications with oil sand
(See Figure 5 ).
Extraction
Suncor will continue with a two-stage extraction process -
separation of bitumen from the sand and cleaning of the bitu-
men froth for further upgrading. The existing bitumen separa-
tion plant will be modified to maximize capability and will
process ore that falls within an economic hydrotransport dis-
tance. It is anticipated that about half of the daily ore process-
ing requirements will be met at the existing primary extraction
plant. A second separation plant will be constructed on the
east side of the Athabasca River to meet production require-
ments. After all the ore within economic distance to the cur-
rent plant is mined, a change to the new facility will be made
allowing for all bitumen separation in one plant on the east
side of the Athabasca River.
Froth cleaning will continue at the existing secondary
extraction plant, with modifications to handle the increased
volume.
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Upgrading
The upgrading expansion proposed in Project Millennium has
additional process units similar to the existing plant, updated
to current technology. A second upgrading train is planned to
consist of diluent recovery, delayed coking and hydrotreaters,
supported by hydrogen production, amine plant and sulphur
recovery. The delayed coker unit is the largest of its kind (28
foot drums) which allows for maximum production and gives
Suncor the added advantage of economy to scale.
Other significant features are the addition of a tail gas
clean-up plant, heat exchange with extraction which will
reduce energy demand and resultant effluents, and extensive
reuse of current waste water streams which will reduce fresh
water consumption at the site.
The product mix from the expanded plant will consist of
light sweet and sour crude oils and diesel, to meet market
demands. Suncor plans to continue to custom blend oil prod-
ucts to meet market and customer demands. Market evaluation
will determine the optimum upgrader configuration for the
best return on investment.
Suncor has also been researching the possibility of entering
into a agreement with Nova in which coker gas is supplied to
their gas plant for removal of the light gas products which are
then sold by Nova. The heavy products will be returned to
Suncor for use in the production process.
Energy Services
To support the expanded production rates, additional steam
and power will be required. The steam will be generated on
site, maximizing the capability of the existing coke-fired boil-
ers, and supplemented by three additional gas-fired boilers
(See Figure 6 ). One of the new boilers will be located within
the existing plant area and will provide steam to the expanded
upgrading and extraction areas. The other two will be located
at the site of the new primary extraction plant on the east side
of the Athabasca River.
The additional electricity needs will be met through either
the purchase of power from the Alberta power grid or by add-
ing a turbo-generator to augment the onsite generation capa-
bility. This new generator would be sized to take advantage of
cogeneration opportunities.
An expansion to the waste heat recovery loop constructed
in the Fixed Plant Expansion is planned. This will further
improve energy efficiencies and minimize carbon dioxide
emissions from the project.
Figure 7 shows the overall production process trains pro-
posed for Project Millennium.
Pipeline
For Project Millennium production to reach the market, addi-
tional pipeline capacity from Fort McMurray is required. In
July 1997, Suncor and IPL Energy Inc. announced that the
separate pipeline projects to transport oil products from the
Athabasca oil sands region have been combined into a single
$325 million project. The new pipeline will be constructed
and owned by IPL Energy Inc. It will have capacity in excess
of 500,000 barrels per day, sufficient to meet Suncor's full
requirements and the needs of other shippers which IPL
Energy Inc. have identified. The pipeline will be operated ini-
tially by Suncor.
Suncor's Growth Advantages
Suncor is uniquely positioned to be a leader in the upcoming
industry growth phase for various reasons. The company has
proven its commitment to the oil sands and over the past 30
years has developed the expertise to sustain a commercially
viable plant while continuously enhancing operation. Some of
the various advantages include:
Scale Advantage:
• Largest coker and vacuum units in the industry allowing
for both economic value and production maximization.
Technology Advantage:
• New and innovative extraction process.
• Updated upgrading and energy services facilities.
Infrastructure Advantage:
• Plant location ideal for agreement with IPL.
• Nova Gas Plant located at the southern boundary of Sun-
cor's Oil Sands Plant.
• 3rd Party Power.
Marketing Advantage:
• Long standing business relationships with clients.
• Custom blending.
• Nova SCO products.
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Schedule
Suncor believes it can best manage growth by implementing
its plan in phases (See Figure 8 ). The interim phase of
increasing production rates to 130,000 barrels per day from
the current plant of 105,000 barrels per day will proceed
immediately with engineering. Regulatory approvals will be
requested as required. The next step of Project Millennium
includes a comprehensive analysis of the entire plant, includ-
ing design engineering work and an environmental impact
assessment, followed by regulatory approvals, final board
approval and construction. Public consultation will occur
throughout all phases of the project.
Environmental Protection and
Management
At Oil Sands, environmental management systems include
planning and program implementation to mitigate the impacts
associated with operations. Suncor has developed a compre-
hensive environmental compliance and assurance process
which is integrated throughout all areas being incorporated in
project design and decision making at all levels of the busi-
ness.
Extra precautions are taken during the planning and con-
struction of projects to ensure the environmental impact of
Suncor's activities is minimized. From the protection of fish
and wildlife habitat, to the conservation of topsoil, and the
preservation of historical artifacts, experts will conduct a thor-
ough assessment of the potential environmental impacts of the
project. This will ensure Suncor understands how best to miti-
gate impacts before construction is started. The environmental
impact assessment terms of reference were established
through a public review process in the fall of 1997 and filing
of the impact assessment report is planned for April 1998.
The intent of Project Millennium is to build upon the envi-
ronmental improvements made as part of the Steepbank Mine
and Fixed Plant Expansion projects. The company is review-
ing opportunities to limit emissions. Although the new units
will offer Suncor improved environmental performance, some
emissions are expected to increase as production rises.
Interests of Stakeholders Conclusion
Since 1992, Suncor has held several public forums and indi- It has been three decades since Suncor began operation of the
vidual group meetings at which the subject of plant expansion world's first commercially successful oil sands venture. Amid
has been reviewed. The areas of most interest are air emis- various challenges, Suncor has implemented innovative and
sions, water management, reclamation, and regional socio- practical technologies and made growth within the industry a
economic impacts. reality. With these changes in oil sand technology, the devel-
Suncor participates in regional environmental committees opment of this resource will be fully competitive with the con-
such as the Regional Air Quality Coordinating Committee, the ventional energy industry. As a result oil sands production will
Regional Aquatic Monitoring Program and the Oil Sands Min- increase sharply over the next decade. Suncor is uniquely
ing — End Land Use Committee. These groups cover a wide positioned to lead this upcoming industry growth phase with
spectrum of environmental issues in the region. Suncor also its new Project Millennium as its central element of oil sands
participates in multi-stakeholder committees regarding hous- growth.
ing, transportation, medical services and other infrastructure
and related community concerns.
On-going discussions will be held with local businesses
and community stakeholders to explain the scope and timing
of the project and to obtain input to project plans. These dis-
cussions will enable groups to plan effectively their opportuni-
ties for participation and for local government to assess any
implications for program planning.
Suncor has a working relationship with First Nations and
Metis communities in the Regional Municipality of Wood
Buffalo. Regular meetings will be held to communicate Sun-
cor's plans, understand concerns, and work toward identifying
mutually beneficial opportunities.

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 Figure 1: Alberta Oil Sands Deposits

Figure 2: Suncor’s Oil Sands Operation

6
Figure 3: Construction of the Fixed Plant Expansion Project

Figure 4: General Arrangement For Mine

7
 Figure 5: Ore Preparation Plant

Figure 6: FGD and Energy Services Plant

8
 Figure 7: Production Process Trains

Figure 8: Project Millennium Schedule