Shell starts-up commercial-scale tailings field demonstration

CALGARY, Aug. 26 /CNW/ - Shell Canada today announced start-up of its commercial-scale Atmospheric Fines Drying field demonstration for managing tailings from its oil sands operations.

"Throughout our industry we all recognize the need to improve our management of the tailings that result from oil sands operations," said John Abbott, Executive Vice President, for Shell's Heavy Oil business. "The challenge is to develop and apply technologies that will accelerate the pace at which tailings can be reclaimed and this demonstration project is a step forward in meeting this challenge."

"As a relatively new player in the industry we don't have the number or scale of facilities of some operators but we share the desire to speed up reclamation and minimize the need to increase the size and number of tailings ponds. We have been very active in tailings research since we began our operations and believe Atmospheric Fines Drying technology could result in a fine tailings deposit which releases water and gains strength in weeks rather than decades."

Shell is working with a number of others in the industry and with research institutes to advance this, and other technologies, as fast as practical.

"The issue is not whether we, as an industry, can reclaim tailings," continued Abbott, "the issue is whether we can do it better and do it faster. We believe that working with others is key towards developing solutions that will allow us to accelerate the pace of reclamation and meet the expectations of the ERCB's Directive-074. We are actively working to promote broader industry collaboration in this area and Shell will openly share the outcome of this demonstration project with industry players, academia, regulators and others interested in working on tailings solutions."

Shell received ERCB approval for operation of the Atmospheric Fines Drying project on August 6, 2010. The demonstration project is located at Shell's Muskeg River Mine. The facility occupies over 0.3 square kilometers (75 acres). The demonstration project is expected to deliver a final deposit of some 250,000 tonnes.

Atmospheric Fines Drying was initially tested at Shell's tailings pilot plant at the Muskeg River Mine and this commercial-scale demonstration is the next stage of development for this innovative technology. It is hoped this project will demonstrate the ability of Atmospheric Fines Drying to be one of a number of technologies we, as an industry, bring to bear on the tailings challenge.

Atmospheric Fines Drying involves using a large barge to collect mature fine tailings (MFT) from the tailings pond and transfer them to the drying area. The mature fine tailings are then mixed with flocculants - chemical agents which help bring the fine clay particles in the MFT together - and placed on a sloped surface to help speed up the release of water from the clay. The released water runs down the sloped surface to a collection area and is returned to the external tailings facility for reuse in the extraction process. What remains are deposits that are further dried to meet strength and reclamation requirements.

Atmospheric Fines Drying could be applied to tailings from both Shell's current Muskeg River Mine and future Jackpine Mine operations.

Shell Canada Energy is 60% owner with Chevron Canada Limited (20%) and Marathon Oil Sands L.P. (20%) of the Athabasca Oil Sands Project (AOSP), including the Muskeg River Mine and Scotford Upgrader, with a capacity of 155,000 barrels per day.

For more information on Shell's Tailings Management visit www.shell.ca/tailings

Tailings facts:

  • Tailings are a mixture of fine clay, sand, water and residual bitumen produced through oil sands extraction.
  • The Shell tailings pond at the Muskeg River Mine is some 14 square kilometers in area.
  • When tailings are released to a pond, the heaviest material — mostly sand — settles to the bottom, while water rises to the top. The middle layer, often called mature fine tailings (MFT) or fluid fine tailings, is made up of fine clay particles suspended in water. These particles remain suspended in water for long periods of time, making it necessary to expand tailings facilities or find new technology to speed up this process.
  • The Energy Resources Conservation Board (ERCB) Directive-074 was introduced in February 2009. The directive specifies performance criteria for the reduction of fluid tailings and the formation of trafficable deposits. Operators may use a suite of technologies to meet the requirements of this directive.

Editor's Note:
Reminder:  10 a.m. Media Availability/Technical Briefing - Media please meet Shell representative in the lobby of Shell Centre, 400 - 4 Ave SW

Shell has been operating in Canada since 1911 and employs approximately 8,000 people across the country. A leading manufacturer, distributor and marketer of refined petroleum products, Shell produces natural gas, natural gas liquids and bitumen, and is Canada's largest producer of sulphur. Shell is one of Canada's oil sands developers and operates the Athabasca Oil Sands Projects on behalf of the joint venture partners.

Royal Dutch Shell plc is incorporated in England and Wales, has its headquarters in The Hague and is listed on the London, Amsterdam, and New York stock exchanges. Shell companies have operations in more than 100 countries with businesses including oil and gas exploration and production; production and marketing of Liquefied Natural Gas and Gas to Liquids; manufacturing, marketing and shipping of oil products and chemicals and renewable energy. For further information, visit www.shell.com.

Cautionary Note

The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this announcement "Shell", "Shell group" and "Royal Dutch Shell" are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words "we", "us" and "our" are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. ''Subsidiaries'', "Shell subsidiaries" and "Shell companies" as used in this announcement refer to companies in which Royal Dutch Shell either directly or indirectly has control, by having either a majority of the voting rights or the right to exercise a controlling influence. The companies in which Shell has significant influence but not control are referred to as "associated companies" or "associates" and companies in which Shell has joint control are referred to as "jointly controlled entities". In this announcement, associates and jointly controlled entities are also referred to as "equity-accounted investments". The term "Shell interest" is used for convenience to indicate the direct and/or indirect (for example, through our 34% shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.

This announcement contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management's expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ''anticipate'', ''believe'', ''could'', ''estimate'', ''expect'', ''intend'', ''may'', ''plan'', ''objectives'', ''outlook'', ''probably'', ''project'', ''will'', ''seek'', ''target'', ''risks'', ''goals'', ''should'' and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this announcement, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for the Shell's products; (c) currency fluctuations; (d) drilling and production results; (e) reserve estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this announcement are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional factors that may affect future results are contained in Royal Dutch Shell's 20-F for the year ended December 31, 2009 (available at www.shell.com/investor and href="http://www.sec.gov/">www.sec.gov ). These factors also should be considered by the reader.  Each forward-looking statement speaks only as of the date of this announcement, August 26, 2010. Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this announcement.

The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions.  We may have used certain terms in this announcement that SEC's guidelines strictly prohibit us from including in filings with the SEC.  U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov. You can also obtain these forms from the SEC by calling 1-800-SEC-0330.


SOURCE Shell Canada Limited

For further information: For further information:

Shell Canada Media Relations
1-403-691-3198
Publicaffairs-Canada@shell.com


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