Connacher Oil and Gas Ltd. (TSX:CLL) is seeking a partner for a joint venture to expand its oilsands operation south of Fort McMurray Alberta. The proposed project would amalgamate Connacher’s existing Great Divide and Algar projects. The new facility would use the steam-assisted gravity drainage (SADG) thermal recovery process.
A Calgary-based oilsands producer has hired international financial advisor Rothschild to find a joint venture partner for the construction of an ambitious expansion project near Fort McMurray, Alberta.
“We have activated a process to find a joint venture partner, by engaging Rothschild to help us find an interested party,” said Dick Gusella, chairman and CEO of Connacher Oil and Gas Ltd. (TSX:CLL).
Connacher has engaged Rothschild to help the company find a joint venture partner to expand its oilsands operations located about 70 kilometres south of Fort McMurray, Alberta.
The proposed project would amalgamate Connacher’s existing Great Divide and Algar projects, which were designed to produce 20, 000 barrels per day (bbl/d) of bitumen.
The new facility would increase production capacity to 44,000 bbl/d at peak production, using the in-situ steam-assisted gravity drainage (SADG) thermal recovery process.
Timely and successful negotiation of a joint venture could facilitate ordering of long-lead items.
These items include boilers and evaporators, which could be ordered by the end of the year.
“This, in turn, could enable the start-up of construction during the latter part of 2012, with first bitumen production by the end of 2013, assuming the initial expansion is comprised of two sequential 12,000 bbl/d projects as opposed to one 24,000 bbl/d project,” said a press release from Connacher Oil and Gas Ltd.
The $600-million project involves the expansion of the central processing facility and the development of up to 40 well pads and 215 well pairs, in three phases over a 25 year production period.
During construction, the project will create direct on-site employment of 700 person years, as well as an estimated 360 person-years of off-site employment for construction workers in fabrication yards, primarily in the Edmonton and Calgary regions.
“It will be recalled that to plan for continued expansion at Algar, Connacher prepared the project site for brownfield expansion, which is anticipated to result in a lower prospective cost structure as a consequence,” said the press release.
“Connacher anticipates detailed costing of its expansion alternatives will be completed at approximately the same time as it receives regulatory approval and near the latter stages of completing negotiations for the proposed joint venture.”
Connacher submitted an application to regulators for approval of an Environmental Impact Assessment for the project in May, 2010 and anticipates approval in late 2011.
Earlier this year, independent petroleum consultants GLJ Petroleum Limited estimated that Connacher has 180 million barrels of reserves associated with its existing projects.
The application for the expansion project is also supported by probable bitumen reserves of about 320 million barrels over 25 years.
Connacher has adopted a modular, small scale approach for the efficient development of its oilsands reserves.
This approach works to mitigate the risk of both time delays and cost pressures associated with traditional large scale oilsands projects.
Rothschild employs more than 1,000 bankers in 40 countries and recently opened its Calgary office in recognition of the increasingly important role the oilsands will play in future energy developments on a worldwide basis.
Recent Comments
comments for this post are closed