(Adds analyst comment, details on Suncor growth plans)
By Nia Williams
CALGARY, Alberta May 8 Suncor Energy Inc
, Canada's largest oil and gas producer, said on Monday
it plans to submit an application to regulators for a new
thermal oil sands project later this year, which could
eventually produce up 160,000 barrels per day.
The Lewis project, located approximately 25 kilometres (15.5
miles) northeast of Fort McMurray in northern Alberta, will be
developed in stages and produce for an estimated 25-40 years.
Suncor said it has not yet formally sanctioned the project,
but if it goes ahead, construction could begin in 2024, with
first steam being pumped into the reservoir to liquefy and
extract tarry bitumen in 2027.
The Calgary-based company also said it is exploring new
technologies to develop the Lewis resource, such as using
solvents or electromagnetic heating instead of steam for bitumen
Chris Cox, an analyst with Raymond James in Calgary said
Lewis fits in with Suncor's strategy of modular growth in the
oil sands, and would be very similar to its recently approved
80,000 bpd Meadow Creek East project.
"Long-term growth is predicated on almost doing a
manufacturing process in (thermal) projects with standardised
plant designs," Cox said.
Canada's oil sands are home to the world's third-largest
crude reserves but also carry some of the world's highest
operating costs globally due to their remote location and
energy-intensive production methods.
The region was hard hit by the global oil price crash that
started in mid-2014, with a number of producers deferring or
cancelling around 20 oil sands projects.
Since then however, companies have reduced costs by around
30 percent making some plants viable even with oil prices
hovering around $50 a barrel.
Meadow Creek East, also in northern Alberta, received
regulatory approval in March and other companies such as Cenovus
Energy and Canadian Natural Resources Ltd have
restarted deferred projects in recent months.
Company spokeswoman Erin Rees said Suncor anticipates
applying for regulatory approval on its 40,000 bpd Meadow Creek
West thermal project later this year.
(Reporting by Nia Williams; Editing by Matthew Lewis and