March 17, 2010

Grizzly Oil Sands seeks approval for project near Fort McMurray

RICHARD GILBERT

staff writer

Grizzly Oil Sands has submitted an application to the regulatory authorities in Alberta for the development of an oilsands project at Algar Lake, near Fort McMurray.

“This application is the culmination of several years of resource delineation, engineering and environmental assessment work,” said John Pearce, CEO of Grizzly.

“We are now embarking upon the detailed engineering and construction planning phase of the Algar Lake SAGD Project and expect to commission the first phase in 2012.”

Grizzly is seeking approval for the stage 1 development of its Algar Lake Project, which consists of two plant phases and 40 well pairs on four well pads.

Each plant phase is designed to operate at an average capacity of 5,000 barrels per day.

The project will utilize steam assisted gravity drainage (SAGD) as the primary extraction method.

The Algar Lake project area is located about 45 kilometres southwest of Fort McMurray and 10 kilometres west of Highway 63, near established and producing oilsands developments.

Upon approval, Grizzly will construct the first phase, consisting of one modular central processing facility, ten well pairs on one well pad, and associated roads and pipelines.

The company also plans to develop the second plant phase two years after approval.

The second phase will include a second modular central processing facility and an additional ten well pairs on one well pad.

Each phase is estimated to cost about $120 million.

In order to maintain consistent production, an additional pad will be required for each phase every five years at an estimated cost of $35 million per pad.

Grizzly expects approvals from the Alberta Energy Resources Conservation Board and Alberta Environment for the project within 12 to 18 months.

The period leading up to first production should be about 18 months.

Third party engineers McDaniel & Associates estimate the Algar Lake Project will ultimately recover about 89 million barrels of bitumen.

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