STUART PROJECT REPORTS PROGRESS ON PLANT COMMISSIONING

The status of the Stuart Stage 1 commissioning program was summarized by I. McFarlane in the Southern Pacific Petroleum NL/Central Pacific Minerals NL (SPP/CPM) December 1999 Quarterly Report, and in a March 2000 Commissioning Update Report.

A 30-hour hot shale run was completed over the November 23-24, 1999, period. The shale feed was successfully increased to 160 tonnes per hour, about 60 percent of plant capacity, before the run was terminated as a result of odor complaints from the neighboring community of Targinnie located 3 kilometers from the plant. The run was successful in producing raw naphtha and medium shale oil products at close to design yields and specifications and in meeting regulated limits on sulfur dioxide, nitrogen oxides and particulates through most of the run. However, following a review of the odor emissions, the Queensland (Australia) Department of Mines and Energy (DME) issued an Environmental Protection Order (EPO) requiring additional air emissions evaluation.

Since this last commissioning run, the operator, Suncor Energy Management Pty Ltd. (SEM), progressed work on equipment and procedural modifications to minimize odor emissions from the plant and conducted a planned maintenance program over the Christmas/New Year period. In addition, SEM developed a comprehensive program to identify and characterize air emissions. As a result of these initiatives, the DME lifted the EPO in January.

Suncor recommenced hot shale commissioning activities on February 4, 2000, with the objective of capturing air emissions samples to identify odor sources and to assess potential health effects. Samples were taken at a number of point sources within the plant and at downwind locations in the neighboring community. Over a 15-hour run period, 60 samples were taken in order to measure the content and concentration of air emissions as well as odor strength and offensiveness.

With respect to potential health effects, the air emissions results were analyzed by R. Drew, one of Australia’s leading toxicologists. He concluded that the results strongly indicate there is little risk of any acute or even medium-term health effects from any of the measured emissions. Regulatory agencies are currently carrying out an independent review of these data.

Further emissions analysis is now under way focused on identifying the relative contribution of individual emission sources within the plant. Air emission monitoring tests were carried out on the shale dryer in order to isolate the impacts of the dryer on emissions and odors. The dryer heats the shale to remove most of its moisture content before it enters the AOSTRA Taciuk Processor (ATP). Some 69 air samples were collected over the test run period at various dryer throughput rates and temperatures. These samples are being analyzed with the same rigor as the ATP test run.

A team of technical specialists has been formed to review these emissions results and operational performance to date. The team will provide ongoing recommendations on narrowing the technical solutions and defining the best way forward. Depending on the scope of these recommended solutions, achievement of reliable production will likely be delayed beyond mid-2000.

Under the terms of the Project Joint-Venture Agreement, Suncor has the option to fund additional costs in excess of the $239 million to complete commissioning, up to a maximum of $20 million. As of January, Suncor is funding project costs and in return, Suncor receives additional product entitlement in Stage 1, up to a maximum of 8 percent, once the plant is operational.

Despite the delay caused by these unexpected air emissions issues, progress on the primary goal of proving up the ATP technology at a large scale in Stage 1 has been encouraging. Raw shale oil products have been produced at near design yields and specifications. The ATP has performed well mechanically through many startup and shutdown cycles. Additional run time is required to confirm yield and product specifications and reliability measures, including operation of the hydrotreater which as yet has not operated on raw naphtha.

Perfecting any new technology is a challenging process and the ATP technology is no exception. While SPP/CPM are disappointed in the delays experienced in the commissioning process and the unexpected air emissions issues, results achieved to date in proving the ATP technology at scale are encouraging, warranting perseverance and additional investment in the project to complete commissioning, says McFarlane.