May 22, 2006

Syncrude shuts down new FGD unit after odour-related EP order issued

Syncrude Canada shut down its new flue gas desulfurization unit and attached equipment, including one of its three coker units (coker 8-3). at the Mildred Lake plant last week after an environmental protection order was issued on May 18 by Alberta Environment. The order was issued as a precautionary measure in response to numerous complaints by residents of Fort McKay and Fort McMurray about unpleasant odours in their communities. The Mildred Lake oil sands processing plant is about 40 kilometres north of Fort McMurray.

The shutdown procedure was completed by the evening of the same day and Alberta Environment is continuing to monitor the ambient air quality in and around the Fort McMurray and Fort McKay communities. The department is also investigating recent odourous emissions from the plant. At this point, these are believed to be associated with the start-up of the new coker unit in early May.

Alberta Environment will follow up immediately with an environmental protection order directing Syncrude to submit a detailed action plan that will address these emissions. The plan must be approved by Alberta Environment before Syncrude can re-start the flue gas desulfurization unit.

"We have been deeply concerned about the odour complaints resulting from the start-up of our expansion project and will continue to work with Alberta Environment and regulators to determine the cause of the recent odours and take appropriate steps to rectify the situation," said Jim Carter, Syncrude president and chief operating officer.

Syncrude will submit a detailed plan to Alberta Environment on its efforts to pinpoint the source of the odours and will continue to fully co-operate with regulators in this regard. Imperial, which holds a 25% interest in the Syncrude project, has offered its support to Syncrude in carrying out the investigation and developing remedial actions.

The flue gas desulfurization unit is a new technology that virtually eliminates SO2 emissions from the expanded facility. When fully operational, it will help Syncrude reduce its overall SO2 emissions.

As of last week, Syncrude could not say how long the coker will remain shut down and what impact this might have on overall volumes produced. The production capacity affected is approximately 100,000 barrels a day. Current production capacity of Syncrude's operation, excluding volumes from Coker 8-3, is about 250,000 barrels a day and is unaffected by the order.

The Syncrude project is a joint venture operated by Syncrude Canada. In addition to Imperial, partners include Canadian Oil Sands Limited Partnership, Canadian Oil Sands, ConocoPhillips Oilsands Partnership II, Mocal Energy, Murphy Oil, Nexen and Petro-Canada Oil and Gas.

More information is available from Pius Rolheiser at Syncrude, 403) 237-2710.

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