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Released December 06, 2018 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Canada's largest oil and gas producer, Canadian Natural Resources (NYSE:CNQ) (Calgary, Alberta), on Wednesday released its proposed 2019 capital budget, which lowers spending C$1 billion ($753 million) from 2018 levels. The company is proposing spending about C$3.7 billion ($2.78 billion) in 2019, compared with C$4.7 billion ($3.54 billion) in 2018. Industrial Info is tracking $21.5 billion in active Canadian Natural Resources projects.
Alberta recently announced that it would curtail oil production by 8.7%, or about 325,000 barrels per day (BBL/d), beginning in 2019 in an effort to help increase the price of Western Canadian Select crude, which currently trades at a steep discount to other types of crude. For more information, see December 4, 2018, article - Alberta to Curtail Oil Production Amid Low Prices, Pipeline Shortage.
In a press release regarding the proposed budget, Canadian Natural was neutral about the planned reduction in production and the lack of pipeline takeaway capacity that has helped reduce prices, but suggested these could affect next year's budget: "The curtailment program recently announced by the Government of Alberta has resulted in the January index prices for crude oil to strengthen significantly. Canadian Natural will monitor the impact over time of curtailment on prices as well as the progress of the two export pipelines (Keystone XL and Trans Mountain Expansion) in the final stages of approval. Dependent on the outcome of these two factors, Canadian Natural has the capacity to adjust our 2019 capital spending budget closer to normalized levels." The company said it had the flexibility to invest another C$700 million ($522.9 million) next year if needed.
Among Canadian Natural's projects under construction is the grassroot Kirby North bitumen production field and processing plant in Alberta. Construction on the $1.2 billion project kicked off in late 2017. In the press release, Canadian Natural President Tim McKay said of the project: "Completion at our Kirby North steam-assisted gravity drainage (SAGD) project is targeted for third-quarter 2019, when facility commissioning and steam circulation will begin, followed by targeted first oil in fourth-quarter 2019. The Kirby North SAGD project will ramp up throughout 2020, with targeted production capability of 40,000 BBL/d in the first half of 2021." For more information, see Industrial Info's project report. A Phase II expansion of the field that would bring total plant production to 100,000 BBL/d also is in the planning stage. For more information, see Industrial Info's project report.
The curtailment of Alberta's oil production will be gradually diminished throughout 2019, but still will be in place by the end of the year. The effect of the curtailment remains to be seen Canadian Natural's future planned projects, many of which are expansions at existing facilities. Among these are the proposed phase IV and V expansions of the company's Horizon oil sands facility, located about 70 kilometers northwest of Fort McMurray, Alberta. The Phase III expansion, completed in late 2017, increased production capacity from 110,000 BBL/d to 250,000 BBL/d. For more information, see Industrial Info's project report. Phase IV, which could kick off in 2020, would boost capacity to 375,000 BBL/d, followed by the possible Phase V expansion, which would lift capacity to 500,000 BBL/d. For more information, see Industrial Info's project reports on the Phase IV and Phase V expansions.
Canadian Natural also has some grassroot production projects under consideration. Among these is the Gregoire SAGD bitumen production and processing plant about 40 kilometers south of Fort McMurray. The plant would have an initial production capacity of 60,000 BBL/d. An authorization for expenditure is expected late next year, which would enable construction to start in summer 2020. The project has an estimated total investment value of $1.8 billion and would take about two years to complete. For more information, see Industrial Info's project report.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Alberta recently announced that it would curtail oil production by 8.7%, or about 325,000 barrels per day (BBL/d), beginning in 2019 in an effort to help increase the price of Western Canadian Select crude, which currently trades at a steep discount to other types of crude. For more information, see December 4, 2018, article - Alberta to Curtail Oil Production Amid Low Prices, Pipeline Shortage.
In a press release regarding the proposed budget, Canadian Natural was neutral about the planned reduction in production and the lack of pipeline takeaway capacity that has helped reduce prices, but suggested these could affect next year's budget: "The curtailment program recently announced by the Government of Alberta has resulted in the January index prices for crude oil to strengthen significantly. Canadian Natural will monitor the impact over time of curtailment on prices as well as the progress of the two export pipelines (Keystone XL and Trans Mountain Expansion) in the final stages of approval. Dependent on the outcome of these two factors, Canadian Natural has the capacity to adjust our 2019 capital spending budget closer to normalized levels." The company said it had the flexibility to invest another C$700 million ($522.9 million) next year if needed.
Among Canadian Natural's projects under construction is the grassroot Kirby North bitumen production field and processing plant in Alberta. Construction on the $1.2 billion project kicked off in late 2017. In the press release, Canadian Natural President Tim McKay said of the project: "Completion at our Kirby North steam-assisted gravity drainage (SAGD) project is targeted for third-quarter 2019, when facility commissioning and steam circulation will begin, followed by targeted first oil in fourth-quarter 2019. The Kirby North SAGD project will ramp up throughout 2020, with targeted production capability of 40,000 BBL/d in the first half of 2021." For more information, see Industrial Info's project report. A Phase II expansion of the field that would bring total plant production to 100,000 BBL/d also is in the planning stage. For more information, see Industrial Info's project report.
The curtailment of Alberta's oil production will be gradually diminished throughout 2019, but still will be in place by the end of the year. The effect of the curtailment remains to be seen Canadian Natural's future planned projects, many of which are expansions at existing facilities. Among these are the proposed phase IV and V expansions of the company's Horizon oil sands facility, located about 70 kilometers northwest of Fort McMurray, Alberta. The Phase III expansion, completed in late 2017, increased production capacity from 110,000 BBL/d to 250,000 BBL/d. For more information, see Industrial Info's project report. Phase IV, which could kick off in 2020, would boost capacity to 375,000 BBL/d, followed by the possible Phase V expansion, which would lift capacity to 500,000 BBL/d. For more information, see Industrial Info's project reports on the Phase IV and Phase V expansions.
Canadian Natural also has some grassroot production projects under consideration. Among these is the Gregoire SAGD bitumen production and processing plant about 40 kilometers south of Fort McMurray. The plant would have an initial production capacity of 60,000 BBL/d. An authorization for expenditure is expected late next year, which would enable construction to start in summer 2020. The project has an estimated total investment value of $1.8 billion and would take about two years to complete. For more information, see Industrial Info's project report.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
