Sunrise Oil Sands Project, Alberta, Canada

Bitumen from the Sunrise oil sands

Sunrise is a bitumen deposit located approximately 37m (59.5km) north-east of Fort McMurray, in Alberta, Canada. As per December 2011 estimates, the deposit is estimated to hold 3.7 billion barrels of bitumen, including 0.36 billion barrels of proved, 2.48 billion barrels of probable and 0.86 billion barrels of possible reserves.

The onshore oil sands project is being jointly developed by Husky Energy and BP, through a 50-50 partnership. Husky Energy will operate the field. The two partners are investing $2.5bn in the first phase of the project development.

The two companies had entered into an agreement in 2008 to establish a partnership with equal ownership for the production, refining and marketing of the Sunrise oil sands project. Under the agreement, Husky transferred 50% of its fully-owned Sunrise project in exchange for 50% ownership in the BP-operated refinery near Toledo in Ohio.

First oil from the deposit is expected in 2014.

Approval to develop the bitumen deposit

The environmental impact assessment (EIA) and conceptual study for the development of the Sunrise field were started ten years ago, in 2002. In February 2004, the Energy Resources Conservation Board (ERCB, formerly Alberta Energy and Utilities Board) and Environment and Sustainable Resource Development (ESRD, formerly Alberta Environment) received a public disclosure document from Husky.

Commercial application to build and operate the 200,000 barrels a day (bbl/d) oil sands project was submitted to the two provincial authorities in August 2004. ERCB approved the project in December 2005, while ESRD gave its nod in October 2006. An amended version of the project was approved in January 2009.

Development of the Canadian onshore oil sands

The project is scheduled to be developed in three phases with the goal of reaching an ultimate production capacity of 200,000bbl/d. The first phase will have a production capacity of 60,000bbl/d.

"Husky transferred 50% of its fully-owned Sunrise project for 50% ownership in the BP-operated refinery near Toledo in Ohio."

Front end engineering and design (FEED) for the first phase was completed in January 2010. Detailed engineering, procurement and construction was launched in November 2010.

Main components of phase one include construction of a central processing facility (CPF), with two 30,000 barrels per day plants; development of surface facilities and site infrastructure; drilling of 49 well pairs on eight well pads; five water supply wells and four disposal water wells; and diluent and diluted bitumen (dilbit) pipelines to / from Edmonton.

As of November 2012, construction on phase one was 50% complete. Phase two is in the pre-engineering stage.

The produced bitumen will be transported to BP-operated Toledo refinery through existing pipelines.

Steam assisted gravity drainage technology

Bitumen from the Sunrise oil sands will be produced by employing an enhanced oil recovery technology known as steam assisted gravity drainage (SAGD). The technology keeps the surface land disturbance to a minimal level and does not require large tailings ponds or open pit mining.

SAGD is applied by drilling a pair of horizontal wells into the reservoir, with a spacing of five metres. The upper well is used as injector well, while the lower well is used as a producer well.

Steam is continuously injected into the upper well to heat the reservoir bitumen and reduce its viscosity. This causes the heated oil to flow into the producer well (lower horizontal well), where it is pumped out.

Contracts for Husky Energy and BP's Sunrise project

SNC-Lavalin was contracted in March 2008 to provide FEED services for the Sunrise project. WorleyParsons was commissioned to provide engineering services for the energy island section of the project.

"The produced bitumen will be transported to BP-operated Toledo refinery through existing pipelines."

In December 2010, Saipem was given an engineering, procurement and construction (EPC) contract worth about $1bn for the Sunrise CPF.

Apart from production and storage of extracted bitumen, the scope of the contact includes oil treatment, removal of oil from produced water, water treatment and steam generation.

Worley Parsons will serve as an EPC contractor for the field facilities. Midstream pipeline and terminal services will be provided by Enbridge as part of a $475m contract announced in September 2010. Atco Structures & Logistics was contracted in May 2011 to provide site services for the project.

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