UPDATE 1-Husky to start further development of Rush Lake thermal oil project

Wed Nov 18, 2015 8:19am EST
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Nov 18 (Reuters) - Canadian oil producer Husky Energy Inc said on Wednesday it would start construction to further develop Rush Lake, its heavy oil thermal project in Saskatchewan.

Husky began to accelerate its heavy oil thermal developments in 2010 as part of its plan to reduce oil recovery costs, and has started production from projects developed as part of the second phase of this plan.

The initial development of Rush Lake, a 13,000-barrels-a-day project, was part of this second phase and further development of this project is part of the third phase of Husky's thermal project plan.

Husky said Rush Lake 2, a 10,000-barrels-a-day project, is expected to be the first of the projects in this phase to start production, in late 2018. The other three projects in this phase are expected to start between 2019 and 2021.

The company said construction resources would be moved to Rush Lake 2 once work on three heavy oil thermal projects under phase two of its thermal portfolio are completed.

Husky said Edam East, one of the three projects, is scheduled to begin production in the second quarter next year, a quarter ahead of schedule.

The other two projects, Vawn and Edam West, are expected to begin production in the third quarter, also a quarter ahead of schedule, Husky said.

These three projects and Rush Lake 1 form part of phase two of Husky's thermal portfolio and are expected to help the company's total thermal-based output reach about 80,000 barrels per day by the end of 2016.

Husky used to produce 18,000 barrels per day using thermal methods in 2010. (Reporting by Amrutha Gayathri in Bengaluru; Editing by Savio D'Souza)