PanCanadian Petroleum Ltd., Calgary, hosted a groundbreaking and Aboriginal blessing ceremony Thursday on the site of the company's Christina Lake Thermal Oil Project located about 170 km south of Fort McMurray in northeast Alberta.
The $400 million project received regulatory approval from the Alberta Energy and Utilities Board in April and the Alberta Environment in August. The $70 million first phase of the project will produce 10,000 b/d of heavy oil, ramping up from 5,000 b/d in 2002 to 10,000 b/d by 2004.
Dave Boone, PanCanadian's executive vice president and chief operating officer, said PanCanadian will employ steam assisted gravity drainage technology (SAGD) to heat and extract the heavy oil. SAGD recovery involves the use of two horizontal wells drilled in parallel, with the producing well located about five meters below the steam injection well. Although the oil in the sandstone reservoir is plentiful, it is a thick, heavy grade of oil that will not flow without being heated, PanCanadian said. Steam will be injected into the 30-meter formation creating a hot chamber that will lower the viscosity of the oil. The heated oil will then flow down into the production well and be pumped to the surface.
Ground preparation for phase one of the project will start in the next few weeks as crews clear the 16-hectare site and install foundations for the central processing plant. PanCanadian has contracted with AGRA Monenco Inc./Titan projects joint venture to complete the detail design, procurement and construction management of the project's first phase.