October 6, 2010

Cenovus plans major oilsands expansion

RICHARD GILBERT

staff writer

Regulatory authorities in Alberta have approved an ambitious three-phase expansion plan at Foster Creek near Fort McMurray, the largest and oldest facility in the province to utilize steam assisted gravity drainage.

“One of the big advantages for us in keeping our construction costs in check has been taking a template approach to our expansions and replicating each successive phase with minor tweaks along the way to ensure optimal performance once the plant enters production,” said Cenovus spokesperson Reg Curran.

“We know what works, so we continue to use it, so that we’re not reinventing the wheel each time we head into an expansion or new plant development.”

Each of the three phases that have been approved by the Alberta Energy Resources Conservation Board are designed to add an additional 30,000 barrels a day of oil production capacity to the Foster Creek facility.

“We do call competitive bids for the construction, though we have our own internal construction management team to oversee the design and implementation of projects, so in essence we’re our own general contractor,” said Curran.

“This allows us to remain on top of the project and prevents them from running away on us from a cost perspective.”

Engineering on Phase F is underway and preliminary ground work is expected to start soon.

“Each phase will share such things as utilities and tanks, that are being built in Phase F,” said Curran.

“Additional wells will have to be drilled for all phases, so new well pads will be constructed, as well as pipelines that lead to the plant.”

“There will also be additional steam generation capacity and an increased capacity to separate oil and water,” he said.

Curran added that the water will be treated, so it can be recycled into steam production.

Cenovus expects to employ about 1,000 people to complete Phase F.

First production from this phase is anticipated in 2014. Production from the other two phases is anticipated in 2016-2017.

“With these approvals, we believe there is a step change in the value of this project as there’s increased certainty around the schedule and timing of the expansion,” said Brian Ferguson, president and CEO of Cenovus.

The next step for the expansion project is to receive endorsement from the Foster Creek/Christina Lake partnership with ConocoPhillips.

“In addition to expanding our current operations, our teams are working hard to prepare for regulatory reviews of several new, additional projects,’’ Ferguson said.

“We anticipate our combined expansions to result in a five-fold increase in our oilsands production by the end of 2019.”

Print | Comment