MEG Energy plans $185m Christina Lake upgrade

Canada’s MEG Energy has announced plans to invest $185 million in a production enhancement programme that aims to add 20,000 barrels per day to the Christina Lake oil sands project’s output within three years.

The company said its board had given conditional approval to the upgrade plans, known as Riser and incorporating infill wells, non-condensable gas (NCG) injection to maintain reservoir pressure and a variety of related proprietary processes.

MEG Energy said that capital costs for the incremental production growth were expected to be in the $15,000 to $20,000 per barrel per day range, but that increased production would reduce the overal per-barrel cost of the development.

“These are relatively low capital, high return initiatives which not only support increased production with shorter lead times, but should also help drive our operating costs even lower,” commented chief executive Bill McCaffrey.

McCaffrey said that the initiative would take 2012’s full-year production to the high end of MEG Energy’s prior estimate of 26,000 to 28,000 barrels per day.

The upgrade is being made to the existing phases 1 and 2 as well as phase 2B of the Alberta oil sands site, pictured above, which is due on stream in 2013.

Riser will be implemented in phases 1 and 2 before the start-up of Phase 3A, slated for 2016.

Over the next two years, MEG plans to drill up to 32 additional infill wells in phase 2 and introduce NCG injection on additional steam-assisted gravity drainage well pairs subject to approval.

The company has raised target production from Christina Lake by late 2014 or early 2015 to 80,000 barrels per day from the previous 60,000.

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