Petro-Canada and Partners Moving Ahead with C$26.2 Billion Oil Sands Project
28 June 2007
|The Fort Hills project area, also showing pipeline and upgrader locations. Click to enlarge.|
Petro-Canada and its partners announced the formal design basis for the Fort Hills Project (FHP)—an integrated oil sands mining project that includes a mine and bitumen extraction plant 90 kilometers north of Fort McMurray, Alberta and an upgrader in Sturgeon County northeast of Edmonton, Alberta.
The Fort Hills Project is expected to produce up to a total of 280,000 bpd of synthetic crude oil by 2015, once all phases are complete. The FHP partners currently project the capital cost of FHP to be C$26.2 billion (US$24.7 billion), and full cost exposure to be C$33.4 billion (US$31.5 billion).
The announcement of the formal design basis marks the partners’s commitment to proceed with the front-end engineering and design (FEED) stage. The FEED process will take about 12 months to complete, producing a definitive cost estimate and the basis upon which the final go-ahead decision on the project will be made.
The first phase of the project is planned to produce 140,000 barrels per day (bpd) of synthetic crude oil (SCO). Associated bitumen production is expected to be about 160,000 bpd. First bitumen production is expected to begin in the fourth quarter of 2011 with first synthetic crude oil production from the Sturgeon Upgrader anticipated in the second quarter of 2012.
The preliminary capital cost estimate for the mine and upgrading components of the first phase of Fort Hills is C$14.1 billion. The FEED project carries a cost of C$1.1 billion. That works out to a capital intensity of about C$108,000 per design barrel of SCO for Phase I. Phase II will double the capacity of Phase I.
Fort Hills Energy L.P. consists of Petro-Canada with a 55% working interest, UTS Energy Corporation with a 30% working interest and Teck Cominco Limited with a 15% working interest, with Petro-Canada Oil Sands Inc., a wholly owned subsidiary of Petro-Canada, as the contract operator for the project.
The Fort Hills mine received regulatory approval in 2002 from Alberta Environment and the Alberta Energy and Utilities Board. The Fort Hills partnership filed the commercial application and environmental impact assessment for the Sturgeon Upgrader with provincial regulators in December 2006.
Petro-Canada is one of Canada’s largest oil and gas companies, operating in both the upstream and downstream sectors of the industry in Canada and internationally. UTS Energy Corporation is focused on growing and developing oil sands assets, with a market capitalization of approximately C$2.5 billion. Teck Cominco Limited is a diversified mining company, headquartered in Vancouver, Canada.
Moving Forward in Oil Sands. Fort Hills...the Next Big Step (Petro-Canada)
Fort Hills Reports & Regulatory Filings
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