Cenovus receives approval for Christina Lake expansion

By OGJ editors
HOUSTON, Apr. 27
-- Cenovus Energy Inc. received approval from the Alberta Energy Resources Conservation Board (ERCB) for three more 40,000 b/d phases for its Christina Lake steam-assisted gravity drainage (SAGD) operations in the Athabasca area of northeast Alberta.

Christina Lake is near Conklin, about 120 km south of Fort McMurray.

When completed, the three expansion phases (E, F, and G) will increase Christina Lake bitumen production capacity to 218,000 b/d.

Cenovus said that with this approval, it has 290,000 b/d of oil sands expansions under construction or approved by regulators. Currently the company's production capacity is 138,000 b/d of bitumen at Christina Lake and the nearby Foster Creek SAGD project.

At Christina Lake, the company has under way engineering and equipment fabrication for Phase E, with first production planned for 2014. It expects production from Phase F to start in 2016 and from Phase G in 2017.

The company estimates that the capital cost of the expansions will be $22,500 (Can.)/flowing bbl.

Christina Lake began as a pilot project in 2000 and is currently producing from Phases A and B about 18,000 b/d from 19 wells. Two 40,000 b/d phases (C and D) are under construction with Phase C almost complete and final testing and commissioning now taking place.

Cenovus estimates that construction of Phase D is more than half-way complete with most of the larger infrastructure items on site and final modules being completed at the company’s assembly yard in Nisku, Alta.

It expects steam injection in Phase D to start in first-quarter 2013 with production starting in the second quarter.

The company estimates that Christina Lake contains more than 700 million bbl of proved plus probable reserves and 800 million bbl of best estimate economic contingent resources.

Cenovus notes that the operation currently has an industry-leading steam-oil ratio of less than 2.0 that contributed to low average operating expenses of $16.47 (Can.)/bbl in 2010.

The company said it expects to make an application for another 40,000 b/d expansion (Phase H) in 2013. Phase H will increase Christina Lake production capacity to 258,000 b/d by 2019.

Cenovus also is moving forward with three approved expansion phases at Foster Creek, which will increase production capacity to 210,000 b/d by 2017 from the current 120,000 b/d.

The company also has a regulatory application for the 130,000 b/d Narrows Lake project in the Christina Lake region. In addition, Cenovus is doing preliminary assessment work on nine other emerging oil sands projects, including Grand Rapids in the Greater Pelican region and Telephone Lake in the Borealis region.

Cenovus has a 50% ownership of Christina Lake, Foster Creek, and Narrows Lake. ConocoPhillips holds the other 50%.

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