Cenovus Energy says Foster Creek oil sands expansion complete

Wed Sep 17, 2014 6:06pm EDT
 
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CALGARY, Alberta, Sept 17 (Reuters) - Cenovus Energy Inc , Canada's No. 2 independent oil producer, said on Wednesday it has begun producing oil from the sixth expansion stage of its Foster Creek oil sands project, adding 30,000 barrels per day of new capacity at the northern Alberta site.

The company, which co-owns Foster Creek with ConocoPhillips , said the Phase F expansion of the thermal oil sands project has begun producing oil. The expansion is expected to add output of 5,000 barrels per day of tar-like bitumen by year end, and will ramp up to full capacity within 12 to 18 months.

The expansion is one of three underway at the project site, with two similarly size projects expected to be complete in late 2015, pushing Foster Creek's capacity to 210,000 barrels per day.

The oil sands of northern Alberta are the world's third- largest oil reserve and the largest source of crude imports for the United States. Rising production from the region has pushed Canadian oil exports to a record, at just under 3 million barrels per day last week, the U.S. Energy Information Administration said on Wednesday.

The company did not release the cost of the latest expansion, but said all three expansion phases cost between C$35,000 to C$38,000 per barrel of capacity, pushing the cost of the 90,000 bpd expansion to as much as C$3.42 billion($3.10 billion). Cenovus said that was below the industry-average cost for oil sands projects.

Cenovus shares ended at C$32.89 on Wednesday on the Toronto Stock Exchange. The stock has risen 7.6 percent over the past 12 months, compared with a 17 percent gain in the exchange's energy index. (1 US dollar = 1.1018 Canadian dollar) (Reporting by Scott Haggett; Editing by Dan Grebler)