September 26, 2008

EnCana and partner to expand Illinois refinery

US$3.6 billion committed to Wood River project

CALGARY

EnCana Corp. and partner ConocoPhillips said this week they are starting construction this month on a major expansion at their joint venture Wood River refinery in Roxana, Ill.

The coker and refinery project is expected to cost US$3.6 billion over three years, half from each company, to increase bitumen-based production for the U.S. Midwest market.

“This refinery expansion and coker addition capture the capital and operational efficiencies of building on a well established refinery,” EnCana chief financial officer Brian Ferguson stated.

The project will add a 65,000 barrel-per-day coker to convert heavy residual oil into lighter oil and gases, which will enable Wood River to process 130,000 barrels per day of oilsands bitumen.

Total refining capacity will rise by 50,000 barrels per day to 356,000, while eliminating 40,000 barrels per day of low-profit asphalt.

The expansion recently received final regulatory approvals.

Parallel with the Wood River project, the EnCana-ConocoPhillips venture has approved output expansions at the Foster Creek and Christina Lake oilsands projects in northern Alberta.

Bitumen output is planned to grow from the current 70,000 barrels per day to 180,000 barrels per day in 2012 and 400,000 barrels per day by 2016.

EnCana announced plans in May to split into two: an integrated oil company with the working name of IOCo, and a pure-play North American natural gas producer.

EnCana is one of North America’s largest producers of natural gas from fields in western Canada and the U.S. Rocky Mountain states and elsewhere. The company, which was formed from the merger of PanCanadian Petroleum and Alberta Energy Co. a few years ago, disposed its overseas operations earlier to focus on North America.

“IOCo will have two strategically located refineries in the U.S., each with significant heavy oil processing capacity,” said Ferguson, who is to be chief executive of the oil company.

Canadian Press

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