Total SA has reported it will suspend engineering and design work on the $11 billion (Can.) Joslyn Creek steam-assisted gravity drainage (SAGD) oil sands project, 60 km north of Fort McMurray in Alberta. The company said it will lay off 150 of the project’s staff.
Total E&P Canada Ltd. Chief Executive Officer Andre Goffart said attempts to reduce costs had not made sufficient progress to move to a final investment decision for the project, adding that the project’s other partners supported the decision. Total said it will continue to work on project engineering to lower costs.
Joslyn became a mine after starting life as a SAGD project. In 2010, the Energy Resources Conservation Board of Alberta (ERCB) released an incident report on the May 18, 2006, steam release that breached the caprock and affected a 125 m by 75 m surface area, marking the only time that a SAGD operation in Alberta had such a breach release steam to the surface (OGJ Online, Feb. 24, 2010). The steam release caused rock projectiles to travel as high as 300 m from the main crater and produced a 1-km dust plume.
ERCB’s report went on to say that the Joslyn project was the shallowest SAGD development in Alberta, with horizontal steam injection wells at less than 100 m in depth.
After the incident, ERCB imposed pressure restrictions on steam injection for the project and in June 12, 2009, approved the suspension of the project.
The project was originally planned as a 100,000 b/d with an $8 billion (Can.) budget, but was later scaled upwards to a capacity of 160,000 b/d with an even larger budget. It was slated to start production in 2017-18.
Total and Suncor Inc. had planned to build an upgrader called Voyageur at Fort McMurray to handle bitumen from Fort Hills and Joslyn, which was nearby. Suncor cancelled the Voyageur project and acquired Total’s interest in early 2013 (OGJ Online, Mar. 27, 2013).