CALGARY�Alberta Energy Co. Ltd. (AEC) has begun construction on a $230 million (Can.) heavy oil thermal recovery project in northeast Alberta. The Foster Creek project near the Primrose Air Weapons Range on the Alberta-Saskatchewan border will use steam injection to recover heavy crude. The target is production of 20,000 b/d by early 2002.
The AEC Foster Creek development will use steam-assisted gravity drainage to recover the oil. Twin parallel wells will be drilled into the reservoir. A steam injection well will heat the bitumen for recovery. AEC said the project would include a $45 million, 32-mile pipeline connection.
Heavy oil development is being spurred by a narrowing price differential between light and heavy crude, which has declined to about $5/bbl. An expansion of the Peace River operation was shelved 2 years ago when oil prices slumped.
Shell Canada Ltd., Calgary, is also reexamining expansion of a heavy oil project in the Peace River area of northern Alberta where it operates a small pilot project. The Peace River in situ project produced an average 6,000 b/d in 1999.
Shell said thermal recovery technology could be used to increase production to 12,000 b/d and eventually to as much as 100,000 b/d.