Suncor Energy Inc.

Suncor Energy Inc.

June 26, 2006 00:00 ET

Suncor Energy completes upgrade to its Commerce City refinery

Environmental and operational enhancements complete
Suncor Energy completes upgrade to its Commerce City refinery

All financial figures are approximate and in US$

Denver, Colorado (June 26, 2006) — Suncor Energy (U.S.A) Inc. today announced the successful completion of the company's $445 million upgrade to its Commerce City refinery. The upgrade allows the refinery to produce refined products, which meet newly regulated emission levels for low sulphur diesel fuel.

In addition to the modifications to meet clean fuels regulations, the upgrades also improve the refinery's environmental performance, and enable Suncor to integrate a broader slate of crude oil products, including sour crude oil from the company's Canadian oil sands production. The upgrade also included an increase in the refinery's ability to process bitumen used in asphalt production.

"Suncor is committed to meeting the region's growing energy demands in a responsible manner," says Mike Ashar, executive vice president. "By upgrading the refinery to produce cleaner fuel from regional crude oil supplies, as well as handling additional bitumen products from Canada's oil sands, Suncor is providing more flexible solutions to meeting the region's energy needs."

The 90,000-bpd refinery — which employs about 360 of the more than 500 people employed at Suncor's U.S. businesses — provides a vital link between the company's large scale oil sands resource base and the growing U.S. energy market. It is a major supplier of Colorado's gasoline and diesel fuel, as well as jet fuel to the Denver International Airport. It is also the largest supplier of paving-grade asphalt in Colorado.

"This was Suncor's first major project at the refinery and it was a tremendous success. Most importantly, the job was done in a safe manner," Ashar said.

Over the two years of the Commerce City refinery upgrade (named Project Odyssey), the project employed a peak construction workforce of approximately 1,300. About 75% of the total project budget was spent purchasing goods and services from Colorado-based businesses.

Suncor Energy Inc. is an integrated energy company headquartered in Calgary, Alberta. Suncor's oil sands business, located near Fort McMurray, Alberta, extracts and upgrades oil sands and markets refinery feedstock and diesel fuel, while operations throughout western Canada produce natural gas. Suncor operates a refining and marketing business in Ontario with retail distribution under the Sunoco brand. U.S.A. downstream assets include pipeline and refining operations in Colorado and Wyoming and retail sales in the Denver area under the Phillips 66® brand. Suncor's common shares (symbol: SU) are listed on the Toronto and New York stock exchanges.

- 30 -

For further information, contact:
Lisha Burnett
Suncor Energy (U.S.A.) Inc.
(303) 793-8012

Additional Information

  • Project Odyssey is the name of the $445 million upgrade to Suncor's Commerce City refinery—the largest refinery in the Rocky Mountain region. The investment marks the second largest capital project in the Denver area, after the city's transportation expansion called T-REX.
  • Project Odyssey consumed 2,150 tons of steel, 740,000 feet of electrical cables and 170,000 feet of pipes.
  • According to the Metro Denver Economic Development Corporation, the project brought more than $1 billion of economic activity to the area.
  • The Environmental Protection Agency (EPA) has mandated that all refineries reduce the sulfur content in diesel fuel to < 15 parts per million (ppm). This project enables Suncor to meet this mandate.

New/Modified Units in Project Odyssey

  • Asphalt Unit (AU) — The Asphalt Unit was modified with new metallurgy in order to run high-acid (TAN) crudes, such as those coming from oil sands. The project at the AU included a new atmospheric tower and a new vacuum tower.
  • Sulfur Recovery Unit (SRU) — The refinery's #2 SRU was modified to be able to add oxygen and recover more sulfur following the desulphurization process.
  • Tail Gas Unit (TGU) — The TGU was installed as part of a requirement to reduce the emissions from our SRU. Simply, the TGU makes both of the refinery's sulfur recovery units more efficient. Sulfur that is recovered in the SRU is recycled through the TGU resulting in a significant decrease in emissions to the air.
  • Hydrogen Plant — The new hydrogen plant uses natural gas to make hydrogen, which is used in the process of removing sulfur from diesel and gasoline.
  • #2 Hydrodesulphurization (HDS) Unit — The #2 HDS was modified to make ultra low sulfur kerosene. The refinery uses kerosene to blend with diesel fuel for cold weather properties.
  • #3 HDS — The #3 HDS was modified to process ultra low sulfur diesel.
  • #4 HDS — The #4 HDS, which was made in Italy and came by ship across the Atlantic Ocean and by rail from the Port of Houston to the refinery, was newly installed and will treat gas oil. Once the sulfur is removed, the gas oil is the feedstock that goes to the fluidized catalytic cracking unit (FCC) to make gasoline.
  • Tank 774 — The refinery installed a new 120,000 barrel storage tank that will hold sour distillate, which is feedstock for the #3 HDS unit.
  • Propane Storage System — The refinery's propane storage system was relocated in order to install the #4 HDS.
  • Sour Water Stripper — The new sour water stripper cleans the water used in refinery processes so it is suitable to go to the refinery's wastewater system.
  • Boiler Feedwater Treatment System — The refinery uses reverse osmosis technology to purify water. The refinery uses the boiler feedwater treatment system to treat city water to make it boiler feedwater quality which is used through the refinery to make steam.
  • Pipeline from Xcel Energy — Modifications were made to the natural gas system that feeds the refinery. Xcel Energy provides natural gas to the refinery.
  • New Cooling Tower — The new cooling tower increases the refinery's cooling water circulation capability.