CALGARY, Alberta (Reuters) - MEG Energy Corp (MEG.TO) said on Monday it has begun formal consultations for its planned 120,000 barrel per day Surmont oil sands project in northern Alberta in advance of a regulatory application it plans to file by mid-year.
The company, which is now expanding its 30,000 bpd Christina Lake oil sands project in Alberta with a second 35,000 bpd phase, said its Surmont project will also use steam-assisted gravity drainage technology, where steam is pumped into the ground to liquefy tarry bitumen deposits.
The oil sands are the world’s third largest crude oil storehouse, behind Saudi Arabia and Venezuela, but the largest open to private investment.
The Surmont property is 80 kilometers (50 miles) south of the town of Fort McMurray and near MEG’s existing project.
“Building on our current production base nearby at Christina Lake, Surmont offers several advantages,” Bill McCaffrey, MEG’s chief executive, said in a statement. “We know the area geology well, we have established strong relationships with regional stakeholders, and it is relatively straightforward to link the project into existing pipeline and transportation infrastructure.”
MEG shares were up 2 Canadian cents at C$40.14 late on Monday morning on the Toronto Stock Exchange
Reporting by Scott Haggett; Editing by Peter Galloway