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AB Government: Supporting oil sands growth and climate action
Sep 11, 2018
Premier Rachel Notley and Energy Minister Margaret McCuaig-Boyd joined Nexen officials, First Nations enterprises and other local suppliers to highlight a $400-million investment by Nexen. Nexen is a wholly owned subsidiary of CNOOC Ltd.
With leading-edge technology, the Long Lake South West project illustrates that a major oil sands producer can be both an energy and environmental leader while showing a long-term commitment to creating good jobs in Alberta’s energy sector.
The steam-assisted gravity drainage (SAGD) production facility expects to achieve first oil production in 2020, and will produce 26,000 barrels per day once it reaches full capacity. This production requires less steam and natural gas on a per-barrel basis, meaning less energy is needed overall for total production. Through these advancements, Long Lake will achieve a 20 per cent reduction in greenhouse gas emissions intensity from current levels by 2025.
“We’ve always said that you can’t write climate action out of economic growth, and you can’t write working people out of climate action. Long Lake South West is a prime example of that principle, putting people to work while growing our energy production and reducing emissions at the same time.”
Rachel Notley, Premier
The $400-million investment in Long Lake South West includes engineering, construction and startup, with more than 90 per cent of this value spent in Alberta. Approximately 250 full-time jobs are expected at the peak of construction, with an estimated $200 million in provincial royalties and property taxes during the life of the project.
“As Albertans, we’re so proud to be world leaders in responsible energy development. When we put the right conditions in place to make our industry more cost- and carbon-competitive, the energy sector steps up to the plate, creating valuable partnerships with First Nations that provide lasting benefits for generations to come.”
Margaret McCuaig-Boyd, Minister of Energy
“The Long Lake South West project demonstrates CNOOC Ltd.’s long-term commitment to the Alberta energy sector. Our oil sands development is an important component of our global portfolio, and through technological advancements we are pleased to be responsibly growing our production while reducing our overall emissions.”
Quinn Wilson, CEO, CNOOC North America
Contracts for the project are in the process of being awarded, with efforts to ensure continued opportunities for local and Indigenous-owned companies. To date, two major contracts have been awarded to First Nations enterprises and/or other local suppliers.
“On behalf of all of us at Christina River Construction, we are pleased to be a major partner in the civil earthworks contract at Nexen. With our partnership with Fort McMurray #468 First Nation, we look forward to positively impacting the local community through employment opportunities, and to play a role in supporting our province for economic development.”
Carolynne McCuaghey, director of Corporate Services, Christina River Construction
”AKITA Wood Buffalo Drilling is pleased to be a part of the Nexen Long Lake South West project. This opportunity will continue to support the communities’ economic growth and we look forward to a safe and successful drilling campaign.”
Karl Rudd, president and CEO, AKITA Drilling Ltd.
Steam-assisted gravity drainage is a thermal production technology which uses two parallel horizontal wells, known as a well pair, one to inject steam, and the other to produce water and oil. Initially, steam is circulated in both wells to establish communication between the wells.
The top horizontal well then continuously injects steam to heat the reservoir, creating a steam chamber. The oil from the chamber drains to the production well below to allow for production initially through pressure drive, and then by artificial lift or gas lift. The steam injection and oil production happen continuously and simultaneously once production starts. This technology has a high ultimate recovery of oil from the reservoir relative to other in situ production technologies.
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