Southern Pacific Resource said yesterday that its STP-McKay steam-assisted gravity drainage (SAGD) project in Alberta, Canada, has begun switching from the warm-up phase to the production phase.
STP-McKay began operations in the Athabasca oil sands region began the warm-up SAGD phase in July. The first of the 12 well pairs is now in the process of converting from steam circulation to bitumen production, and additional pairs will be converted in the coming weeks. After conversion, the volume of steam injected and the volume of produced fields will be gradually increased to produce a targeted total 18,000 B/D of bitumen. Each well is expected to take 12 to 18 months to reach peak rates. A planned second project phase at STP-McKay will ultimately bring its capacity to 36,000.
Southern Pacific announced in June that it had arranged to transport its bitumen product from STP-McKay to the US gulf coast by rail. The agreement includes dedicated loading and offloading capacity at two new rail terminals in Lynton, Alberta, and Natchez, Mississippi. Both terminals, and about 500 rail cars, are under construction. Volumes of bitumen produced prior to January 1, 2013 will be delivered to intra-Alberta markets
At the company’s STP-Senlac project in Unity, Saskatchewan, a drilling rig has arrived and is expected to spud this weekend on the first of six horizontal wells that will comprise the project’s next phase. The phase comprises three SAGD well pairs, and production from this well pad is expected towards the end of February, after the wells are drilled, completed, equipped, and warmed up with steam. Production for August and September at STP-Senlac has been steady at about 3,000 B/D and production levels will increase as expansion phase is brought on line.
Last month, the company began transporting about a third of its production volumes at STP-Senlac by rail, usinga newly constructed rail terminal at Unity.