Suncor revives Firebag oil sands expansion

By OGJ editors
HOUSTON, Nov. 13
-- Suncor Energy Inc. will resume investment in the 50%-complete third stage of its Firebag in situ development in the oil sands of Alberta.

The company has approved capital spending of $5.5 billion (Can.) in 2010, including $900 million for the next step in Firebag expansion and $50 million for the fourth stage. With other projects, the “growth capital” part of Suncor’s investment plans for next year totals $1.5 billion.

The company suspended work on the Firebag third stage early this year, along with plans for expanded upgrading capacity for its mining operations. Resumption of the upgrading investment is not part of the 2010 capital budget.

Noting “some improvement” in crude prices and the overall economy, Suncor Pres. and Chief Executive Officer Rick George called the budget “a conservative capital strategy” that Suncor can support from free cash flow at “midcycle” crude prices.

The third and fourth Firebag stages are to have production capacities of 68,000 b/d each from steam-assisted gravity drainage. Production from the third stage is to start in the second quarter of 2011 and from the fourth stage in the fourth quarter of 2012.

Total production from the first two stages, which started up in 2004 and 2006, averaged 54.3 million b/d in July-September.

Production from those stages is recoverying from cap of 42,000 b/d imposed in 2007 by Alberta regulators in response to excessive sulfur emissions from the Firebag operation. The cap was lifted in the third quarter of 2008.

Suncor is completing a sulfur plant, expected to cost $400 million, able to handle emissions from all six planned Firebag stages.

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