DECATUR - Oil sand miners in Canada have reached into their deep pockets and splashed more than $90 million on 19 of the world's biggest trucks, built by Caterpillar Inc. in Decatur.
Three of the 797B 400-ton capacity monster vehicles have arrived at the Albian Sands Energy Inc.'s Muskeg River Mine in Alberta. The other 16 are due to be delivered later this year and throughout 2008 at Albian Sands' Jackpine Mine, a vast new project set to come on stream in 2009.
The deal, valued at more than $100 million Canadian, is a major coup for Caterpillar and promises work and job security stretching into years. And with the 797B having a working life of at least 10 years - and usually much longer - a fleet purchase of this size also guarantees a steady demand for service parts, many of which are manufactured at the Decatur plant.
"The oil sands application is a very tough one, and the rigor of that application is such that the parts requirement is quite high," said Ed McCord, the Decatur-based product manager for large mining trucks. "That business (parts supply) is attractive to us, just like selling an additional truck."
Albian Sands uses an exclusively Caterpillar fleet of vehicles for its oil sands production. The sand contains prehistoric deposits of a thick material that is processed to form synthetic crude oil of very high quality. Canada has enough oil sands reserves to sustain a production rate of 3 million barrels a day for some 200 years, pretty much ensuring a steady stream of business for the mining trucks and other machinery built in Decatur, which dominates this market.
The latest big order for the 19 797Bs was won by Vancouver-based Finning International Inc., the largest Caterpillar dealer in the world. "Albian Sands is an important oil sands customer, and we are proud to grow our relationship with them as they expand their production," said Ian Reid, president of Finning (Canada). In the fourth quarter of 2006, Finning reported record revenue, up 26 percent from a year ago, and said it had orders on its books worth $1.5 billion.
Customers who order a shiny yellow 797B today might wait two years to get one, but Caterpillar says it's working hard to speed up that delivery time. Aside from hiring more workers, the company has made major investments in training, tooling and machinery, not only for itself, but for the companies that supply it with crucial components.
"We have a very detailed program to increase our capability to build this product," McCord said. "We would like to be able to be in a position to fulfill orders much faster than we can right now."
Tony Reid can be reached at treid@herald-review.com or 421-7977.
Posted in Local on Monday, May 14, 2007 12:00 am Updated: 12:02 pm.
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