StatoilHydro Canada Plans to Invest $20 Billion in Alberta to Develop Oil Sands Reserves

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Researched by Industrial Info Resources (Sugar Land, Texas)--StatoilHydro Canada Limited (Calgary, Alberta), the Canadian business unit of StatoilHydro ASA (NYSE:STO) (ADR) (Stavanger, Norway), is planning to invest $20 billion to fully develop its Kai Kos Dehseh oil sands project over the next decade. StatoilHydro plans to develop the project into a 220,000-barrel-per-day (BBL/d) bitumen production and integrated upgrading project.

The bitumen will be produced through a steam-assisted gravity drainage (SAGD) process and will be spread over seven phases of construction of which the first phase is already under construction. The proposed upgrader will be constructed in three phases with the possibility that more than half of the capacity of the third phase of the upgrader will be open to the merchant market in the area.

Phase I of the Leismer SAGD project began construction in late 2007. It is expected to produce up to 20,000 BBL/d of bitumen after its completion in the fourth quarter of 2009. The engineering, procurement and construction contract for the facility was awarded to WorleyParsons MEG (Calgary), and the construction management contract was awarded to IMV Projects Incorporated (Calgary).

After completion of the first phase, StatoilHydro will begin construction on Phase II and add a further 20,000 BBL/d of production. StatoilHydro is negotiating with companies like Enbridge to construct and operate a pipeline to tie in this new bitumen production to a local pipeline.

After StatoilHydro completes development of the Leismer property, it intends to build SAGD-type production facilities at Corner, Hangingstone, Thornbury and South Leismer. Full production from all these properties and from the upgrader should be reached between 2018 and 2020.

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