Suncor Energy Inc. yesterday unveiled an ambitious preliminary plan to more than double its oil sands production over the next 10 years, at a cost that could run as high as $10-billion.
In public disclosure documents filed with Alberta provincial regulators, the Calgary-based integrated oil and gas company proposed to increase its production from northern Alberta oil sands to 500,000-550,000 barrels a day in the 2010-2012 period. That's up from the 225,000 b/d production capacity the company expects by the end of 2001, when its recently opened $3.25-billion Project Millennium oil sands expansion reaches full speed.
Yesterday's disclosure formalizes and expands on growth plans the company first disclosed in January, 2000. At that time, Suncor had said it planned to increase its oil sands production to 400,000-450,000 b/d by the end of 2008.
"This officially begins the regulatory and consultation process," said company spokeswoman Brenda Erskine.
Suncor said it won't have a preliminary cost estimate for the entire expansion project, dubbed Voyageur, until late next year. However, Ms. Erskine said the company is using a "very rough estimate" of about $1-billion a year in capital spending on the project.
One key element of the proposed expansion is the Firebag in-situ oil sands project north of Fort McMurray, in which Suncor plans to extract bitumen from underground using steam injection. Suncor plans to add 35,000 b/d of production from Firebag by the end of 2004, at a cost of about $1-billion, and intends to expand Firebag to 140,000 b/d by the end of 2008.
Firebag received regulatory approvals last month. Suncor's board is expected to give final approval on the project financing by the end of 2001.
As for the rest of Voyageur, Suncor expects to receive approvals and make a production decision in 2004 for the first phase, which would increase production to the 2008 target of 400,000-450,000 b/d. The company would make its decision on the second phase in 2008.
Ms. Erskine said the Voyageur project would also include expanding Suncor's oil sands mining operations just outside Fort McMurray.
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David Parkinson