Production begins at Husky’s Dee Valley thermal project

Dee Valley will provide low-cost, reliable feedstock for the company's Upgrader, asphalt refinery and US refineries

Husky Energy's Dee Valley thermal project is expected to yield 10,000 b/d. Husky Energy photo.

On Monday, Husky Energy announced it has begun production at its 10,000 barrel per day (b/d) Dee Valley thermal project in Saskatchewan.

Dee Valley is one of six thermal bitumen projects which will be brought online between 2018 and 2022.

Husky CEO Rob Peabody said the thermal projects will provide low-cost, reliable feedstock for the company’s Upgrader, asphalt refinery and US refineries.

“These projects have direct access to our refining hub in Lloydminster and can be transported via committed export pipeline capacity to our refineries and other U.S. markets.”

Peabody added that the Saskatchewan facilities are not subject to government-mandated production quotas. “In addition, we have many diverse investment options, including the Atlantic region, a large Downstream presence in the U.S. and high-netback growth production in Asia,” said Peabody.

“As such, competitiveness of jurisdiction will remain a key parameter for our investment decisions.”

Dee Valley will ramp up through year end, increasing Husky’s thermal production in Saskatchewan to 90,000 b/d.

In October 2018, Husky began production at its 11,000 b/d Rush Lake 2 Lloyd thermal project, with a steam-oil ratio of 2.1, which Husky says is among the best in the industry.

In a press release issued by Husky, the company says its low operating costs, good oil quality and advantaged logistics allow the Calgary-based company to further reduce its break-even Brent oil price.

Husky says its heavy oil production is matched by its Downstream processing and pipeline takeaway capacity through 2021, with tight physical integration providing for increased margin capture.

Along with Dee Valley and Rush Lake 2, the company says it is advancing four other thermal projects in Saskatchewan, including:

  • Spruce Lake Central, drilling has been completed and construction of the Central Processing Facility is progressing, with first production anticipated in the second half of 2020
  • Spruce Lake North, foundation work and module fabrication is under way, with first oil planned around the end of 2020
  • Spruce Lake East, lease construction is advancing and first production is set for around the end of 2021
  • Edam Central, regulatory approval has been received and first production is expected in 2022

The remaining four projects are each expected to yield 10,000 b/d.

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