Ikelic - Alliance Digital Repository

STATUS OF OIL SANDS PROJECTS (Underline denotes changes since June 1994)
COMMERCIAL PROJECTS (Continued)
The expansion, at a cost of $200 million, required the drilling of an additional 213 wells for steam injection and bitumen
production, plus an expanded distribution and gathering system. Wells for the expansion were drilled directionally from eight
pads. The commercial project includes an expanded main complex to include facilities for separating water, gas, and bitumen;
a utility plant for generating steam; and office structures. Additional off-site facilities were added. No upgrader is planned for
the expansion; all bitumen extracted is diluted and marketed as a blended heavy oil. The diluted bitumen is transported by
pipeline to the northern tier refineries in the United States and the Canadian west coast for asphalt production.
An application to the Energy Resources Conservation Board received approval in early November 1984. Drilling began in
February 1985. Construction began June 1985. The expansion was on stream October 1986.
In 1989 production was increased to the design capacity of 1,600 cubic meters of oil per day. The Peace River complex com
pleted its first full year of operating at capacity in 1990. Its 10 millionth barrel of bitumen was produced in March. Through a
combination of increased bitumen production and reduced energy requirements, the unit bitumen production cost has been
reduced to 30 percent of that averaged during the first full year of operation. The operation was producing about
10.000 barrels/day of bitumen. However, in 1994 production declined to 7.000 barrels/day. Changes to the recovery process to
restore production were implemented late 1994 and results to date have been encouraging. Ultimate recovery is projected at
55 percent of the bitumen in place.
On January 25, 1988 the ERCB approved Shell Canada's application to expand the Peace River project from 10,000 barrels per
day to approximately 50,000 barrels per day. PREP II, as it will be called, entails the construction of a stand-alone processing
plant, located about 4 km south of PREP I. PREP II would be developed in four annual construction stages, each capable of
producing 1,600 cubic meters per day. However, due to low world oil prices and continual with uncertainty along the lack of
improved fiscal terms the expansion project has been postponed indefinitely. Some preparatory site work was completed in
1988 consisting of the main access road and drilling pads for PREP II. The ERCB approval for PREP II was allowed to lapse,
however, in December 1990. Continued world oil price contributed uncertainty largely to the decision not to seek an expan
sion.
Research into the application of a steam drainage process has led to the design of a two-well horizontal well demonstration
project. The project is testing the technical and economic feasibility of bitumen recovery utilizing surface-accessed horizontal
wells, employing an enhanced steam assisted gravity drainage process. The estimated lifetime of the project is 12 years during
which 80% of the bitumen initially in place is thought to be recoverable. The project is tied into existing Peace River complex
facilities and began operating in November 1993. After steam injection for two months, production was expected to be about
1,000 barrels per day.
Project Cost: $200 million for PREP I
$570 million for PREP II
- PRIMROSE LAKE COMMERCIAL PROJECT Amoco Canada Petroleum Company and Alberta Energy Company (T-170)
Amoco (formerly Dome) proposed a 25,000 barrels per day commercial project in the Primrose area of northeastern Alberta.
extensive explora
Amoco is earning a working interest in certain oil sands leases from Alberta Energy Company. Following
tion, the company undertook a cyclic steam pilot project in the area, which commenced production in November 1983. and
thereby earned an interest in eight sections of adjoining oil sands leases. The 41 well pilot was producing 2,000 barrels per day
of 10 degrees API oil in 1984.
The agreement with Alberta Energy allows Amoco to earn an interest in an additional 194,280 acres of adjoining oil sands
lands through development of a commercial production project. The project is estimated to carry a capital cost of at least
$C1.2 billion and annual operating cost of $C140 million. Total production over a 30 year period will be 190 million barrels of
oil or 18.6 percent of the oil originally in place in the project area. Each section will contain four 26-well slant-hole drilling
clusters. Each set of wells will produce from 160 acres on six acre spacing. The project received Alberta Energy Resources
Conservation Board approval on February 4, 1986. A subsequent amendment to the original scheme was approved on August
18, 1988. The 12,800 acre project will be developed in three phases. Four 6,500 barrel per day modules will be used to meet
the 25,000 barrel per day target.
In 1989, Amoco undertook some additional work at the site by drilling a horizontal well. In 1990 Amoco announced it would
drill two more wells to assist in engineering design work. Six hundred thousand dollars was planned to be spent on this effort
in 1990.
A new steam injection heavy oil pilot was placed in production in early 1991. By the end of 1991, AEC expected to be testing
more than 80 wells various using techniques, including a cold technique which employs specialized pumps.
In 1991, ERCB gave approval for seven horizontal wells to maximize bitumen recovery under a steam stimulation/gravity
drainage process.
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SYNTHETIC FUELS REPORT, JANUARY 1995