Husky to spend $5.25 billion (Can.) over 10 years on oil sands projects

Husky Energy Inc., Calgary, plans to invest $5.25 billion (Can.) [$3.5 billion (US)] over 10 years in three oil sands projects in northern Alberta. One project will be at Tucker Lake, west of Cold Lake, Alta. Two others will be at Kearl Lake, on leases about 50 miles north of Fort McMurray.


By an OGJ Online Correspondent


CALGARY, Feb. 23
�Husky Energy Inc., Calgary, plans to invest $5.25 billion (Can.) [$3.5 billion (US)] over 10 years in three oil sands projects in northern Alberta.

One project will be at Tucker Lake, west of Cold Lake, Alta. Two others will be at Kearl Lake, on leases about 50 miles north of Fort McMurray.

The Tucker Lake project will be the first of the phased projects and will cost $350 million-$450 million (Can.). Husky said it plans to make a regulatory filing in January with a target of 15,000 b/d to 20,000 b/d of production by 2004.

The Kearl Lake No. 87 lease, which will be developed later, covers 48,880 acres. Husky owns 51% and Imperial Oil Ltd., Toronto, has 49%.

The two companies also hold a smaller adjacent lease, No. 6, to the north on a 50:50 ownership basis. Imperial said recently it will spend $1 billion (Can.) to expand its extensive heavy oil operation at Cold Lake in eastern Alberta (OGJ Online, Feb. 20, 2000).

Husky is considering a pit mining operation to recover bitumen on the northern half of lease 87 and part of lease 6. The southern half of lease 87 is being considered for steam assisted gravity drainage recovery.

The southern half of lease 87 would be developed first at an estimated cost of $1.6 billion. Production would start between 2005 and 2007.The pit mining operation would cost at least $3.2 billion with a completion date between 2008 and 2112.

Husky said it and Imperial still must perform detailed planning on the projects.

Husky, which recently went public and acquired Renaissance Energy Ltd., Calgary, has major heavy oil interests in Alberta, operates a heavy oil refinery and upgrader at Lloydminster on the Alberta-Saskatchewan border, and has extensive lease holdings on the East Coast offshore. It has production of about 250,000 boe/d.

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