PetroPetro--Canada Refinery Conversion ProjectCanada Refinery Conversion Project

Presentation to AACE, CalgaryPresentation to AACE, Calgary

November 9, 2005November 9, 2005

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TLM MOMENTTLM MOMENT

•All Losses are important and represent an opportunity to improve• Health• Safety• Environmental• Quality

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BUILDING ON SUCCESSBUILDING ON SUCCESS

RCP IS IN THE HOMESTRETCHExecution phase is culmination of over 10 years of work

RCP completes transformation of Edmonton Refinery & is critical to the continued economic success of Petro-Canada’s downstream businessTank farm, SIG, EDD & GOT projects have built and continue to build a foundation of success for RCPCollectively, Petro-Canada, Bantrel, Jacobs & their subcontractors will cap off the conversion journey with a successful RCP project!

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PETROPETRO--CANADA CONTINUES TO PURSUE A FULLY CANADA CONTINUES TO PURSUE A FULLY INTEGRATED OIL SAND STRATEGYINTEGRATED OIL SAND STRATEGY

26,000 bpdpurchased

sour synthetic

135,000 bpdrefined products

to market

27,000+ bpdbitumen

22,000+ bpdsour synthetic

Edmonton Refinery

~50,000 bpdsweet synthetic

crude

2008+

35,000 bpdpurchased

bitumen blend 26/9

30 - 40,000 bpdIn Situ II

SuncorMacKay River

In Situ

Syncrude

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DESULPHURIZATION & DESULPHURIZATION & RECONFIGURATIONRECONFIGURATION

Edmonton Refinery – Pre Low Sulphur Fuels OperationEdmonton Refinery – Infrastructure Support (Tank Farm 1 - 2001)Edmonton Refinery – Infrastructure Support (Tank Farm 2 - 2003)Edmonton Refinery – Sulphur in Gasoline (SIG - 2004)Edmonton Refinery – Edmonton Diesel Desulphurization (EDD - 2006)Edmonton Refinery – Refinery Conversion Program (RCP - 2008)

Tank Farm 1

Tank Farm 2

Refined Products to Market

LightCrude Conventional

Crude & Vacuum Unit

Sulphur Plant

Hydrogen Plant

Secondary

Units

&

Product

Blending

Synthetic Crude Unit

SweetSynthetic

BDS (Naphtha & Distillate)

Delayed Coker

Gasoil Hydrotreater

EDD Hydrogen

Plant

Distillate Hydrotreater

RCP Hydrogen

Plant

Sour Crude & Vacuum Unit

Sour Syn& Bitumen

16.6 KBPD Delayed Coker

RCP Sulphur Plant

Naphtha Hydrotreater

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PROJECT SUCCESS CRITERIAPROJECT SUCCESS CRITERIA

PROJECT GOAL:

To safely deliver a first quartile facility that will utilize bitumen derived feedstocks to meet the product demands as forecasted.

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PROJECT SUCCESS CRITERIAPROJECT SUCCESS CRITERIA

Project Critical Success Factors:Zero harm to all who work on the projectAcceptable project economics achieved by: • Optimizing project execution - Execution excellence• Delivering the FEED scope inside $1550MM• Mechanical Completion by Q2 2008• Full nameplate capacity in < 45 days after mechanical completion

Zero production impact on the existing facilities during commissioning

People make projects workCommunicate – often, openly, & contracting for action

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REFINERY CONVERSION REFINERY CONVERSION PROJECT PROFILEPROJECT PROFILE

• Conversion of the Edmonton Refinery to Process 85,000 BPSD of heavy oil and Bitumen by 2nd Quarter 2008

• ScopeCrude UnitVacuum UnitDelayed CokerRevamp of Existing UnitsSulphur ComplexAssociated U&O, Automation and Site Prep

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RCP PROCESS AREASRCP PROCESS AREAS

Coker

Sulphur Complex

Plant 63 Revamp

Crude / Vacuum Plant 2-4

RevampDelayed Coker

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CRUDE/VACUUMCRUDE/VACUUM

Crude Tower

Vacuum Tower

Desalter

Vacuum HeaterCrude Heater

Substation & I/O

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DELAYED COKERDELAYED COKER

Coke Drums

Coker Fractionator

Coker Heater

Rail Car Handling System

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REVAMPS REVAMPS –– PLANTS 1, 2 & 4PLANTS 1, 2 & 4

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REVAMPS REVAMPS –– PLANT 63PLANT 63

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SULPHUR COMPLEXSULPHUR COMPLEX

Amine Pump-house & Surge

Tank

Amine Regeneration

Area

Sour Water Stripping

Units

Sulphur Recovery

Units

SuperclausUnit

Sulphur Storage

IncineratorAmine Regeneration

Area

Sour Water Stripping

Units

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UTILITIES AND OFFSITESUTILITIES AND OFFSITES

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PROCESS AUTOMATIONPROCESS AUTOMATION

OBJECTIVES:Provide fully integrated process control system integrating existing and new units

Ensure all areas of system design and execution comply with existing standards and are consistent across areas

SCOPE CAN BE DIVIDED INTO 2 PARTS:Upgrade existing control system to new Experion® operating Platform

Process Control implementation

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PROCESS AUTOMATIONPROCESS AUTOMATION

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CURRENT STATUSCURRENT STATUS

• Feed completed• Long lead equipment order placed• Stage Gate Review completed• Baseline established• Petro-Canada Board approval received • Execution Phase Kick-off – November 7th, 2005

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PROJECT BASELINEPROJECT BASELINE

• Capital cost $1.55 Billion• Schedule completion April 2008

Project Approval – October 2005Site Prep complete March 2006Construction start – April 2006Engineering 80% complete November 2006Module fabrication commences March 2006Construction completion in Shutdown April 2008Full production 2nd Quarter 2008

• Zero Harm, Zero Loss, Zero Impact

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ESTIMATE BREAKDOWNESTIMATE BREAKDOWN

Sour Crude/Vacuum

Sulphur Complex

Delayed Coker

Existing Plant Revamps

U&O (including Site Prep &AutomationOwners Cost

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EXECUTION STRATEGYEXECUTION STRATEGY

• Petro-Canada Managing Contractor• EPC Silo Execution (Jacobs and Bantrel) • Sub-contractor and DFL Construction• Supplier of Choice Agreements• Work Package approach to E P & C• 80/100 strategy for construction packages• WBS supports Execution Plan• Bag and Tag approach to Revamp work• RFO integral part of Project Team• Site preparation to be completed in early 2006

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PROJECT SILO STRUCTUREPROJECT SILO STRUCTURE

RCP

Coker AutomationCrude Vac

Bantrel Bantrel Bantrel

Sulphur Complex RevampsF&I U&O

Bantrel Jacobs Bantrel Bantrel

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PROJECT EXECUTION STRUCTUREPROJECT EXECUTION STRUCTURE

Construction Facilities and Site Infrastructure, F&I

Crude/ Vaccume

Delayed Coker

Utilities &

OffSite

RevampSulphur Complex

General Automation Contractor, GAC

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EXECUTION STRATEGIESEXECUTION STRATEGIES

Scope is defined – robust FEED packageFunds are allocated – the resources are availableTeams are experienced - and know how to do it

They know the Refinery, its people and requirementsThey have the systems, structures, methodologies, procedures and lessons learned

RCP will “Build on Success” of recent successful projectsRCP is larger than EDD, it is much more complex

Market conditions, complexity, site congestion, integration…

We will take it to the next level!

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EXECUTION STRATEGIESEXECUTION STRATEGIES

The Project participants are working together to further a culture of cooperation, no surprises and no changes.

Open and honest communicationRegular and frequent contactClear expectations of roles and responsibilitiesDiscussion and alignment with success criteriaAdherence to procedures and execution plansIdentify potential issues when they arise

• No SurprisesProactive versus reactive

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PROJECT CHANGE CRITERIA PROJECT CHANGE CRITERIA

Scope is definedExecution Plan has been optimized by the team

Non-discretionary changes affecting design, only if:It is not safe or environmentally acceptableIt won’t workIt’s not operable or maintainableIt doesn’t meet regulatory requirements

Discretionary change:Return on investment > 50% / 1 year payout for proposed scope versus design specificationsNo schedule impact

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COST & SCHEDULECOST & SCHEDULE

ScheduleSchedule basis is backward driven from RFO completion

Level 3 FEED is baselined

Cost ControlSanction is $1550 Million, including Owner’s cost

The project is cost driven and must deliver

Trend surveillance, especially on quantities, as design progresses is the key

The projects needs everyone to play a role

Progress MeasurementKey quantities and deliverables updated on a regular basis

IFCs must be linked to the schedule

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CONSTRUCTION EXECUTIONCONSTRUCTION EXECUTION

ZERO HARM, ZERO REWORK, ZERO IMPACTBasis for construction sequencing is Systems Handover priorities

This drives engineering IFC issuesEngineering planning is driven back from RFO handover

PRE-COMHYDROFLUSH

REINSTATEPIPE

INSTALLEWP-CWP-

IWP HANDOVER

Management of Interfaces across the silos is key to successful RCP construction completion

U & O Team to leadRCP Team to make Edmonton Refinery the site of choice for Trades

THOR

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PROCUREMENT EXECUTIONPROCUREMENT EXECUTION

The very hot market makes it critical that we complete vendor awards quickly with quality packages and control changes

This requires diligent inspection in the vendor shop throughout the process

Expediting and Quality control starts with the order and continues until the material is satisfactorily delivered at siteProcurement Quality – on schedule, meets specs and completePC has established Supplier of Choice (SOC) agreements for key bulk piping materials that will be used by the EPCs

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ENGINEERING EXECUTIONENGINEERING EXECUTION

Maintain the 80/100 rule with all deviations processed through the MOC Procedure Engineering execution is quality and timely delivery adhering to the scheduleEnsure data is received early to support design

Consider all avenues to advance required vendor information

Early planning reviews have been conducted for:ConstructabilityOperabilityMaintainabilityConstruction sequencing

Regular quantity trending as design progresses

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MOVING FORWARDMOVING FORWARD

To meet Petro-Canada’s expectations, the project is focusing on the road ahead with energy, vigor, rigor and diligenceThe FEED package is robust.The project has a very experienced project team However, we have risks…

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SIGNIFICANT RISKSIGNIFICANT RISKTO SUCCESSTO SUCCESS

Competitive Market PlaceHome office personnel availability Equipment cost and delivery scheduleBulk material cost and availabilityFabrication shop loadingSubcontractor availabilityLabour cost and availability Construction supervisionConstruction equipment availability

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BUILDING ON SUCCESSBUILDING ON SUCCESS

QUESTIONS ?