Fort Hills start-up "exceeding expectations"

Fort Hills start-up "exceeding expectations"

Teck Resources provided an update on the new Fort Hills oil sands mine this week, as part of its first quarter earnings release.

The first of three secondary extraction trains started up at the end of January, with the second train commencing production in March. Both trains are reportedly running well, exceeding expectations with respect to both production volumes and product quality, producing over 100,000 bbl/day of bitumen.

The third train is scheduled to be completed and commissioned sometime in the second quarter, with production expected to reach full capacity by the end of the year.

The company says mining, ore preparation and secondary extraction may have excess capacity, but testing is currently underway to determine the limits of each major processing unit. 

 
 

Teck says it has seen strong demand for its partially-deasphalted Fort Hills Diluted Bitumen (FRB) blend. The company has 425,000 barrels of storage capacity at the Hardisty storage terminal and 100,000 barrels of diluent storage capacity at Fort Saskatchewan.

Teck's dilbit volumes are exported through Enbridge's Mainline and Express pipelines, as well as the existing Keystone pipeline. Additional volumes have been committed on the Trans Mountain Expansion Line and Keystone XL, should they ever be completed. Teck also has access to a rail loading facility, should crude transport by rail be required. 

According to operator Suncor Energy, the facility has a nameplate capacity of 194,000 bbl/day. Operating costs are expected to average $35 to $40 a barrel this year, falling to $20 to 30 by year end, excluding transportation, storage and diluent blending. 

Teck's share of Fort Hills increased to 21.3% at the end of last year. The company also owns a 100% interest in the Frontier oil sands project, which is currently in the regulatory review process. A decision from the regulators is expected sometime in 2019.

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