Fort Hills Mine up and running as partner Total mulls selling another stake
Fort Hills is located 90 km north of Fort McMurray, just north of Syncrude's Aurora Mine on the east side of the Athabasca River. This latest facility is the ninth operating oil sands mine in the area.
The process plant has a nameplate capacity of 194,000 bbl/day of bitumen, which will be diluted with condensate and sold directly to market as heavy oil without being upgraded into light synthetic crude.
The bitumen production facility has three secondary extraction trains, one of which has been put into service. The second and third trains are still being insulated and should start-up in the first half of this year.
The project partners say the mine should achieve 90% of nameplate capacity by the end of the year, or roughly 180,000 bbl/day. As the company ramps up production, operating costs are expected to decline to a range of $20 to $30 per barrel by the fourth quarter of this year.
Partner Total hinted again this week that the oil sands mine no longer fits into its long term vision of only sticking wth "low breakeven" projects. In 2015, the French energy major cut its stake from 39% to 29% and recently sold another 3% stake to its partners. The company says it would like to "eventually settle near 25%" once the final costs are tallied. Total currently owns a 26.05% stake in the Fort Hills Partnership, with the balance owned by operator Suncor (53.06%) and Teck (20.89%).
At last estimate, capital costs for the mine were pegged at $17 billion, almost $2 billion more than its original budget, although Suncor has yet to confirm final numbers. Some of the cost increases were attributed to the 2016 spring wildfires which forced the evacuation of the construction site. Suncor will announced its full year 2017 earnings results on February 7, where they may provide more clarity on the plant's operating metrics.
SUNCOR ENERGY SUNCOR ENERGY TRANSITIONS TO CONTINUOUS OPERATIONS AT FORT HILLS
TECK TECK ANNOUNCED FIRST OIL AT FORT HILLS
TOTAL CANADA: FORT HILLS PROJECT REACHES FIRST OIL AT
OIL SANDS MAG MINING PROJECTS: FORT HILLS