The Elephant in the room
February 06, 2014
When contemplating the construction projects in the north planned for 2014 the elephant in the room is the oil sands.
The oil sands projects involve billions of dollars in capital investment employing thousands of workers and contractors. A few of the notable ones:
- Canadian Natural says that operating performance at Horizon has been strong since the company executed its first major turnaround in May 2013. The overall phased expansion to 250,000 barrels per day is 30 per cent physically complete, with the first phase in that expansion, Reliability, 91 per cent physically complete and five per cent under budget.
- Imperial Oil says he second phase of its giant Kearl oil sands mining project is about 58 per cent complete.
- Brion Energy says the first phase of the MacKay River project’s detailed engineering is 84 per cent complete, drilling is 48 per cent done, and 34 per cent of construction has been finished.
- Suncor and its partners have sanctioned the Fort Hills project and construction will start in 2014.
- Suncor’s Dover demonstration plan is testing - hot oil is currently being circulated into the reservoir to open a path between the injection well and the producer well. Propane or butane injection on the solvent-only production pilot is expected to begin in the first quarter of 2014. Operations will continue until 2015.
- Suncor at MacKay River The company continues to move toward a 2014 expects to increase production by approximately 20 per cent over the next two years through debottlenecking.
- Athabasca says that construction at Hangingstone is nearly half complete and remains on budget and on schedule for first steam in the fourth quarter of 2014.
- Cenovus says Phase F of its Hangingstone project is on schedule and on budget with 85 per cent of the project complete. Phase G is 60 per cent complete, and Phase H is 27 per cent complete.
- Cenovus says the Phase F expansion at Christina Lake is on schedule and on budget with about 37 per cent of the project complete, plant construction and engineering work continuing. Engineering work also continues for Phase G.
- Cenovus says plant construction at its Narrows Lake project began in August.
- Devon Canada’s Jackfish 2 project recently produced over 40,000 barrels per day, exceeding nameplate capacity. The Jackfish 3 expansion is 80 per cent complete
- Baytex says the SAGD well pair for its Gemini SAGD pilot was drilled in the third quarter of 2013, and the company remains on track for steaming by early 2014.
- Pengrowth says that civil construction of the first 12,500-barrel-per-day commercial phase commenced in August at its Lindbergh project. The project remains on budget and on schedule with first steam from the commercial project expected in the fourth quarter of 2014.
Meanwhile, some other notable 2014 projects ‘north of 56’ not in the oil sands would include:
- Baffinland’s Mary River iron ore mine on Baffin Island.
- Chieftain Metal’s Red Chris copper/gold mine in northern BC.
- A trio of run of the river projects in northern BC by AltaGas (in partnership with BC Hydro).
- Intense activity on Alaska’s North Slope as a variety of companies drill for hydro-carbon deposits.
The economic significance of the oil sands cannot be overstated. With BC’s LNG projects yet to start construction oil sands projects will account for the bulk of the private sector investment activity in 2014.