Hangingstone Demo suspends production, at least for now
Japan Canada Oil Sands (JACOS) has temporarily suspended bitumen production at their Hangingstone demo plant due to low oil prices.
Hangingstone is a thermal in-situ facility located 50 km southwest of Fort McMurray with a capacity to produce 6,000 bbl/day of bitumen. The facility has been in operation since 1999 but was shutdown in May due to encroaching forest fires. The plant did not sustain any damage.
The company says it is continuing construction of its Hangingstone Expansion project, which will add 20,000 bbl/day to the facility's nameplate capacity. Construction is nearing completion and first oil is expected sometime next year. JACOS' current operations staff of about 200 are being transferred to the expansion plant.
The original demo plant was not connected by pipeline, forcing the company to truck product out of the facility. In 2013, Enbridge agreed to build a 52 km 12-inch lateral pipeline, connecting Hangingstone to the Cheecham Terminal near Fort McMurray. Diluent return to the SAGD operation will be provided by Inter Pipeline, through a 2 km lateral connection to their existing Polaris Pipeline.
Although the company did not provide specific timing for restart of the demo plant, it is hoped production will be restored after the expansion and pipelines are up and running. Higher production rates and lower transportation costs should dramatically reduce operating costs, making the facility economically viable.
JACOS is the Canadian subsidiary of Japan Petroleum Exploration Company.