Laricina Energy Reaches Construction Phase of $55 Million Saleski Oil Sands Pilot Plant

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Researched by Industrial Info Resources (Sugar Land, Texas)--Laricina Energy Limited (Calgary, Alberta) has progressed the Saleski oil sands pilot testing plant to the construction phase. Led by former president of Deer Creek Energy Glen Schmidt, Laricina Energy began construction on the dual-phase pilot testing plant in January 2010, soon after Laricina Energy received its regulatory approvals for the new 1,800-barrel-per-day (BBL/d) bitumen-production facility. The new pilot plant will be constructed in two phases. The first phase will test the Grosmont formation for bitumen production utilizing steam-assisted gravity drainage (SAGD). The second phase, scheduled to begin construction in 2011, will test the Grosmont resource for bitumen production utilizing cold-solvent technology and will inject propane in conjunction with SAGD.

Laricina Energy has awarded the engineering and construction contract for the Saleski pilot plant to IMV Projects Incorporated (Calgary) and is currently setting foundations in preparation for the major equipment. Laricina Energy expects to complete construction on the Phase I pilot plant by October 2010. Completion of Phase II is scheduled for 2011.

Depending on the pilot testing results, Laricina Energy is prepared to follow through with a commercial-scale bitumen production plant. The company expects to begin with regulatory filings for the 10,000-BBL/d commercial-scale plant sometime in the late second or early third quarter of 2010. Depending on testing and permitting progress, Laricina Energy expects to select an engineering company in early 2012. Laricina Energy is currently utilizing the services of IMV Projects in preparation for the commercial-scale plant regulatory filing. Construction on the commercial-scale plant could begin by late 2012, with plant completion and steaming start-up commencing in the third quarter of 2013. Early estimates conducted by Laricina Energy have indicated that the Saleski property could support approximately 270,000 BBL/d of bitumen production from the Grosmont carbonates once fully developed.

Glen Schmidt was the president of Deer Creek Energy until it was bought out by French energy giant Total SA (NYSE:TOT) in a CND$1.58 billion takeover. In the end, Total offered more than CDN$31 per share, increasing its offer after an unidentified rival surpassed Total's initial offer. Before the takeover bid, Deer Creek Energy's shares were trading in the CDN$16 range. Laricina Energy is currently a privately funded company, but there will be a need for further funds to bring the Saleski projects to fruition, and this could mean taking Laricina Energy public.

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