CALGARY: Southern Pacific Resource Corp. is expanding its steam-assisted gravity drainage (SAGD) project in Alberta’s Athabasca oil sands region.

The 6,000 bbl/d expansion at the STP-McKay Thermal Project, 45 kilometres northwest of Fort McMurray, will increase bitumen capacity of 18,000 bbl/d.

The Calgary-based energy company says the $150-million expansion of Phase 1 will significantly reduce capital costs in the entire project and accelerate the production growth forecast.

The expansion takes advantage of excess capacity that was incorporated into the original design and construction of Phase 1, which has water treatment capability for an additional 50,400 bbl/d of water.

Southern Pacific says additional steam generation will be needed to convert an incremental 16,400 bbl/d (50,400 bbl/d total) of treated water to steam and an additional cogeneration turbine will supplement the demand for power.

The rest of the project will involve piping modifications and small equipment additions.

The company plans to incorporate approval for the expansion into the Phase 2 approval process.