Delayed West Ells SAGD project to start up this summer

Full first steam from the West Ells thermal oil sands project in the Athabasca region of Alberta is slated to commence in late June, with production launch in September.

Sunshine Oilsands Ltd., Calgary, previously was to begin steam injection during the third or fourth quarter of 2013 (OGJ Online, Apr. 22, 2013).

Delays have postponed the steam assisted gravity drainage project, which will produce 5,000 b/d in Phase 1 and another 5,000 b/d in Phase 2.

The company explains, “There is a potential to take advantage of lower contract and labor costs by spreading West Ells completion and commissioning activities over a longer time period in the softening labor and contracting environment.”

The cost was estimated at $496 million in 2013. Construction of West Ells facilities, restarted in October 2014, is 92% complete, with only one large module remaining to be shipped.

Sunshine says it “continues to look for opportunities for joint ventures to reduce capital commitments and to accelerate activities aimed at increasing production.” It’s also seeking “opportunities to secure additional financing to expand construction, operations, and development activities.”

If more “financing is secured to fund Phase 2 expansion at West Ells,” the company says, then “significant cost efficiencies can be secured through contracting at lower costs and through avoidance of demobilization and remobilization costs through an extended schedule.”

Sunshine says West Ells is “central to validating the commercial potential of the Wabiskaw formation in the West Ells, Thickwood, and Legend project areas.”

The company also reported a fourth-quarter 2014 net loss of $12.3 million, compared with $7.5 million in fourth-quarter 2013. During full-year 2014, Sunshine reported a net loss of $26.8 million, compared with $32.8 million for full-year 2013.

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