AER approves Cenovus’ Telephone Lake oil sands project
Initial phases approved for production capacity of 90,000 bbls/d.
CALGARY — Cenovus Energy Inc. has received approval from the Alberta Energy Regulator (AER) and the Alberta government for its Telephone Lake thermal oil sands project.
The proposed project is located approximately 90 kilometres northeast of Fort McMurray, within the company’s Borealis Region of northern Alberta.
The approval is for a steam-assisted gravity drainage (SAGD) project with initial production capacity of 90,000 barrels per day (bbls/d), which is anticipated to be developed in two 45,000 bbls/d phases. Telephone Lake is expected to eventually have total production capacity in excess of 300,000 bbls/d, with a project life of more than 40 years.
Cenovus filed its Telephone Lake regulatory application and Environmental Impact Assessment in the fourth quarter of 2011.
The company has drilled more than 300 stratigraphic test wells at the property over the past 10 years, confirming the Telephone Lake reservoir has high permeability and a thickness similar to that of Cenovus’s existing Christina Lake thermal oil sands project. The company also conducted a dewatering pilot project that was concluded during the fourth quarter of 2013, demonstrating its ability to remove an underground layer of non-potable water sitting on top of the oil sands deposit at Telephone Lake.
While dewatering is not essential to, the company said it will enhance project economics and reduce the impact on the environment. Approximately 70% of the top water was removed during the dewatering pilot and replaced with compressed air, which Cenovus expects will improve the steam to oil ratio (SOR) of the project.