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Teck provides update on progress at Fort Hills

Teck provides update on progress at Fort Hills

Teck Resources provided an update on the upcoming Fort Hills oil sands project this week, as part of its first quarter earnings release. The company says construction is more than 83% complete, with the mining, ore preparation, primary extraction and infrastructure plants already turned over to operations.

Teck says construction activities are now focused on completing the utilities and secondary extraction facilities. At the end of the first quarter, more than 60% of operations personnel have been hired.

First oil is expected from one of three secondary extraction trains by the end of this year. The other two trains are scheduled to be completed and commissioned in the first half of 2018. The company expects production to reach 90% of nameplate capacity by the end of 2018. 

Bitumen, diluent and blend pipelines will terminate at the East Tank Farm, located near Suncor's base plant operations. The tank farm is nearing completion and will be in service prior to start-up of the mine.

Fort Hills will produce partially-deasphalted diluted bitumen (dilbit), similar in quality to Imperial Oil's Kearl oil sands mine. The Fort Hills partners have contracts in place for dilbit deliveries to Hardisty via Enbridge's Wood Buffalo pipeline, with diluent shipped back to site from the Edmonton terminal on Enbridge's Norlite Diluent pipeline.

 
GRAPHIC COURTESY TECK RESOURCES

GRAPHIC COURTESY TECK RESOURCES

 

Teck says it will provide a update on its marketing strategy by the end of the second quarter.

Teck Resources owns 20% of Fort Hills, which will be operated by partner Suncor Energy. Teck's share of capital expenditures is expected to total $640 million this year, putting the full project's total 2017 capital spend at $3.2 billion.

Last February, Suncor raised the Fort Hills total estimated cost to a range of $16.5 to $17 billion, while nameplate capacity was boosted to 194,000 bbl/day.

Suncor owns 50.8% of the project while French energy giant Total owns the remaining 29.2%.

Teck is also advancing the Frontier oil sands mine, which is currently in the regulatory review process. A final investment decision is not expected until sometime next year.

Cenovus shares remain under pressure despite a decent Q1

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