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JACOS Hangingstone SAGD pilot project

April 01, 2012

Japan Canada Oil Sands Limited (JACOS) is owned by Japanese interests. Its Hangingstone SAGD pilot project produces about 8,000 barrels per day of bitumen. The site is located about 50 km. south-west of Ft.McMurray.

The major owner is JAPEX (Japan Petroleum Exploration Co., Ltd.) with an 86% share. JACOS started in the Athabasca area in 1978 when the company “farmed in” on leases held by Petro-Canada, Canadian Occidental (Nexen Inc.) and Esso (Imperial Oil) to form what is referred to as the PCEJ group. All of these companies are currently active in pursuing oil sands development in the region. JACOS and its partners experimented with a cyclic steam stimulation pilot project on the Hangingstone Lease from 1983 to 1994. From 1992 to 1997, JAPEX participated in the AOSTRA SAGD pilot experiments at the UTF (Underground Test Facility) site.

With the positive results from the UTF project, JACOS decided to further pursue SAGD technology at the Hangingstone site. A 3-phased “Demonstration” project was designed and constructed with the first phase becoming operational in 1999. The project has a 20-25 year life and is in its 11th year of production.

JACOS employs 45 people on site and another 30 at its Calgary headquarters.

JACOS (75%) along with NEXEN (25%) are pursuing development plans for the larger portion of the Hangingstone lease. Work is now completed on the EIA and the project application has been submitted on April 29, 2010. Commissioning and start-up of the facilities is expected in the third and fourth quarters of 2014. JACOS believes that Hangingstone could be expanded to 35,000 barrels per day over a 25-30 year period.

Commentary

What is striking about the Hangingstone project is the long history of research that proceeded the pilot project. Now after a decade of running the pilot project JACOS is planning to move to a larger production scale.

Sources