Cenovus Energy Inc., Calgary, has received approval from the Alberta Energy Regulator (AER) and the province of Alberta for its wholly owned Telephone Lake thermal oil sands project, 90 km northeast of Fort McMurray in the company’s Borealis Region of northern Alberta.
The company filed regulatory application and environmental impact assessment for Telephone Lake in fourth-quarter 2011.
The steam-assisted gravity drainage (SAGD) project will have an initial production capacity of 90,000 b/d anticipated to be developed in two 45,000 b/d phases. Telephone Lake is expected to eventually have total production capacity of more than 300,000 b/d, with a project life of more than 40 years.
The company has drilled more than 300 stratigraphic test wells on the property over the past 10 years, confirming that the Telephone Lake reservoir has high permeability and a thickness similar to that of Cenovus’s existing Christina Lake thermal oil sands project (OGJ Online, Aug. 29, 2013).
Cenovus says it also conducted a dewatering pilot project that was successfully concluded during fourth-quarter 2013, demonstrating the company’s ability to remove an underground layer of nonpotable water sitting on top of the oil sands deposit at Telephone Lake.
While dewatering is not essential to development of Telephone Lake, the company believes it will enhance project economics and reduce the impact on the environment.
About 70% of the top water was removed during the dewatering pilot and replaced with compressed air, which Cenovus expects will improve the steam to oil ratio (SOR) of the project.
As of Dec. 31, 2013, the independent qualified reserves evaluator (IQRE) estimated Cenovus’s best estimate bitumen economic contingent resources for Telephone Lake at 2.6 billion bbl. Cenovus expects to reclassify a significant portion of these contingent resources to proved plus probable reserves once a development plan is approved by the company. The company expects to make a decision on the timing of development in 2015.
Cenovus is operating two oil sands projects. Christina Lake has a current gross production capacity of 138,000 b/d while Foster Creek’s is 150,000 b/d. Expansions continue at both projects.
Construction of Phase A at the company’s Narrows Lake project is progressing (OGJ Online, June 1, 2012). Cenovus holds 50% of the three projects with partner ConocoPhillips.
Cenovus is also moving ahead with Phase A of its wholly owned Grand Rapids oil sands project (OGJ Online, Mar. 21, 2014).