EnCana and ConocoPhillips begin Wood River refinery expansion



    CALGARY, Sept. 24 /CNW/ - EnCana Corporation (TSX, NYSE:   ECA), through
its 50-50 integrated oil venture with ConocoPhillips, will begin construction
this month of a Coker and Refinery Expansion (CORE) project at the Wood River
refinery in Roxana, Illinois. The project will expand upgrading capacity as
well as increase production of clean transportation fuels for the U.S. Midwest
market.
    "The CORE project will transform Wood River into a more modern, efficient
refinery producing a high proportion of clean transportation fuels in the
heart of one of North America's largest consumer markets. This refinery
expansion and coker addition capture the capital and operational efficiencies
of building on a well-established refinery. It will be a key component of
growing our integrated oil business at a highly competitive capital cost,"
said Brian Ferguson, EnCana's Chief Financial Officer.
    The CORE project is estimated to cost a total of about US$1.8 billion net
to EnCana ($3.6 billion gross) and is expected to be completed over the next
three years. It will:

    
    -   Add a 65,000 barrels-per-day (bbls/d) coker to enable processing of
        growing supplies of heavy crude oil
    -   Increase total crude oil refining capacity by 50,000 bbls/d to
        356,000 bbls/d
    -   More than double heavy crude oil refining capacity to 240,000 bbls/d
    -   Increase the clean product yield by 10 percent to 89 percent
    -   Eliminate 40,000 bbls/d of low-value asphalt production
    

    The Wood River refinery expansion recently received final regulatory
approvals to start construction. Crews began installing foundation pilings
this week. The CORE project is expected to be in full operation in 2011. In
parallel with the Wood River refinery expansion, the integrated oil venture
has approved upstream expansions at Foster Creek and Christina Lake in Alberta
where EnCana expects gross bitumen production capacity will grow from the
current level of 70,000 bbls/d to about 180,000 bbls/d in 2012. Further
expansions are planned to increase production capacity to 400,000 bbls/d by
2016.
    In May, EnCana announced plans to split into two independent,
highly-focused energy companies - one an integrated oil company with the
working name of IOCo and the other a pure-play North American natural gas
company. The EnCana reorganization is subject to shareholder and regulatory
approval, and is expected to be completed in early 2009.
    "When the CORE project is complete, IOCo will have two strategically
located refineries in the U.S. each with significant heavy oil processing
capacity. Combined, the Wood River refinery and the Borger refinery in Texas
will have a total heavy oil capacity of 275,000 bbls/d, placing IOCo among the
leading heavy oil refiners in the U.S.," said Ferguson, who is the designated
President & Chief Executive Officer of IOCo.

    
    -------------------------------------------------------------------------
                           Wood River Refinery(1)
    -------------------------------------------------------------------------
    (bbls/d)                                           Current     Post-CORE
    -------------------------------------------------------------------------
    Crude capacity                                     306,000       356,000
    Heavy oil capacity                                 110,000       240,000
    Clean products                                     250,000       330,000
    Asphalt                                             40,000             0
    -------------------------------------------------------------------------

    (1) volumes represent interests of EnCana and ConocoPhillips
    

    Cost competitive upgrader addition

    A standalone upgrader with a coker of this size - 65,000 bbls/d - is
capable of processing about 130,000 bbls/d of bitumen. Based on this
processing capability, the capital efficiency would be about $28,000 per daily
flowing barrel of bitumen. Combined with EnCana's announced upstream
production expansions, total capital efficiency for this integrated project
would be approximately $50,000 per daily flowing barrel of bitumen. EnCana's
integrated business produces bitumen from northern Alberta reservoirs,
upgrades the oil and refines it into market-ready petroleum products,
including gasoline, diesel and jet fuel.

    EnCana Corporation

    With an enterprise value of approximately $65 billion, EnCana is a
leading North American unconventional natural gas and integrated oil company.
By partnering with employees, community organizations and other businesses,
EnCana contributes to the strength and sustainability of the communities where
it operates. EnCana common shares trade on the Toronto and New York stock
exchanges under the symbol ECA.

    ADVISORY REGARDING FORWARD-LOOKING STATEMENTS - In the interests of
providing EnCana shareholders and potential investors with information
regarding EnCana, including management's assessment of EnCana's and its
subsidiaries' future plans and operations, certain statements contained in
this news release are forward-looking statements or information within the
meaning of applicable securities legislation, collectively referred to herein
as "forward-looking statements." Forward-looking statements in this news
release include, but are not limited to: future economic and operating
performance; statements with respect to anticipated or future results from the
CORE project, including upgrading and refining capacities, production of clean
transportation fuels, capital costs and capital efficiencies available from a
refinery expansion project compared with other types of projects, the
construction and completion schedule, anticipated elimination of asphalt
production, anticipated improved energy efficiency; the anticipated combined
capacities of the Wood River and Borger refineries; the anticipated ranking of
IOCo among U.S. refiners; and the impact of the integrated heavy oil business
on exposure to fluctuating field prices, and capturing benefits of the full
value chain; and the anticipated production, timing thereof, and expenditures
associated with planned expansion of oil production at Foster Creek and
Christina Lake. Readers are cautioned not to place undue reliance on
forward-looking statements, as there can be no assurance that the plans,
intentions or expectations upon which they are based will occur. By their
nature, forward-looking statements involve numerous assumptions, known and
unknown risks and uncertainties, both general and specific, that contribute to
the possibility that the predictions, forecasts, projections and other
forward-looking statements will not occur, which may cause the company's
actual performance and financial results in future periods to differ
materially from any estimates or projections of future performance or results
expressed or implied by such forward-looking statements. These risks and
uncertainties include, among other things: volatility of and assumptions
regarding oil and gas prices; assumptions based upon the company's current
guidance; fluctuations in currency and interest rates; product supply and
demand; market competition; risks inherent in the company's marketing
operations, including credit risks; imprecision of reserves estimates and
estimates of recoverable quantities of oil, natural gas and liquids from
resource plays and other sources not currently classified as proved reserves;
the ability of the company and ConocoPhillips to successfully manage and
operate the integrated North American oil business and the ability of the
parties to obtain necessary regulatory approvals; refining and marketing
margins; potential disruption or unexpected technical difficulties in
developing new products and manufacturing processes; potential failure of new
products to achieve acceptance in the market; unexpected cost increases or
technical difficulties in constructing or modifying manufacturing or refining
facilities; unexpected difficulties in manufacturing, transporting or refining
synthetic crude oil; risks associated with technology; the company's ability
to replace and expand oil and gas reserves; its ability to generate sufficient
cash flow from operations to meet its current and future obligations; its
ability to access external sources of debt and equity capital; the timing and
the costs of well and pipeline construction; the company's ability to secure
adequate product transportation; changes in royalty, tax, environmental and
other laws or regulations or the interpretations of such laws or regulations;
political and economic conditions in the countries in which the company
operates; the risk of war, hostilities, civil insurrection and instability
affecting countries in which the company operates and terrorist threats; risks
associated with existing and potential future lawsuits and regulatory actions
made against the company; and other risks and uncertainties described from
time to time in the reports and filings made with securities regulatory
authorities by EnCana. Although EnCana believes that the expectations
represented by such forward-looking statements are reasonable, there can be no
assurance that such expectations will prove to be correct. Readers are
cautioned that the foregoing list of important factors is not exhaustive.
    Furthermore, the forward-looking statements contained in this news
release are made as of the date of this news release, and, except as required
by law, EnCana does not undertake any obligation to update publicly or to
revise any of the included forward-looking statements, whether as a result of
new information, future events or otherwise. The forward-looking statements
contained in this news release are expressly qualified by this cautionary
statement.
    Further information on EnCana Corporation is available on the company's
website, www.encana.com.





For further information:

For further information: Investor contact: EnCana Corporate
Communications, Paul Gagne, Vice-President, Investor Relations, (403)
645-4737; Ryder McRitchie, Manager, Investor Relations, (403) 645-2007; Susan
Grey, Manager, Investor Relations, (403) 645-4751; Media contact: Alan Boras,
Manager, Media Relations, (403) 645-4747

Organization Profile

Encana Corporation

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890