A strong economic boost is coming to the Northwest with the news that Husky Energy is going ahead with two new heavy oil thermal projects in the area.
The projects are the 10,000 barrels/day Edam East project and the 10,000 barrels/day Vawn project. The company said in a news release Jan. 9 that engineering is underway and construction is scheduled to happen later this year.
Mel Duvall, manager of media at Husky Energy, Inc., said some job creation can be expected with the two projects.
Both projects are to be completed in 2016 and will "create 20 full-time jobs, so 40 between the two," said Duvall.
Some additional support jobs are expected to be created as well.
During construction, it is expected "each plant will peak at around 400, but we'll never have 800 people there at one time. We'll be staggering the work between the two plants so we won't have that many people out there."
The plan is for the finished projects to use thermal energy to bring oil up from under the ground.
He describes it as "very similar to the steam-assisted drainage projects you see going on in the oil sands, except on a small scale."
He says Husky's Sunrise project produces 60,000 barrels per day and using two horizontal wells including a steam feed that heats up the oil. The other is a second well below that uses gravity to pump crude to the surface.
It wouldn't be quite correct to call the technology typical of what they do, Duvall says, as "it's a fairly new technology that we've been able to put to use in the Lloydminster region."
"Most of the production that's been done there has used conventional methods over the years," said Duvall. But, over the last five or six years, "we've really been able to see the benefits of using this thermal technology to get at some of the resources that are there."
The projects in Edam and Vawn follow several other projects in Husky Energy's thermal portfolio. It began in 1981 with the Pikes Peak project that has current production of 4,200 barrels per day.
The Bolney/Celtic project that commenced in 1996 has current production of 16,000. The Rush Lake pilot project in 2011 has current production of 1,500. Paradise Hill in mid-2012 had 5,000 production and Pikes Peak South in mid-2012 had 10,000.
Projects under construction include the Sandall project due in the first half of 2014 with a design rate of 3,500 barrels per day, and the Rush Lake project due for the commercial second half of 2015 at 10,000 barrels per day.
Duvall says the new design for the projects at Edam and Vawn will be based on the design used at Pikes Peak South.
In a statement Jan. 9, Husky Energy CEO Asim Ghosh said, "three years ago, with heavy oil production fighting to remain flat, we implemented a strategy to transform and rejuvenate the business. We are seeing the results of that today."
Ghosh added "steady performance from our existing thermal facilities and these two new plants, along with projects currently under construction at Sandall and Rush Lake, will add another 33,500 barrels per day of new production over the next three years, more than offsetting declines in non-thermal production."
North Battleford city council greeted the Husky Energy projects in Edam and Vawn with enthusiasm at a meeting Monday. Councillor Greg Lightfoot says the announcement will spur on some development in North Battleford.
"The recent announcement by Husky Oil just to the north of us, within half an hour drive, I think will bode well for definitely some commercial and probably some residential projects in the future," said Lightfoot.
The news was also greeted with enthusiasm at the regular meeting of the Battlefords Chamber of Commerce board of directors Tuesday. At that meeting, council's representative on the board, Ryan Bater, acknowledged the impact of the new project could be taken into consideration in the official community plan, which is coming back to council this month.
"I don't think that announcement's got nearly as much attention as it deserves," said Bater, who called it a "big project right next door."
He also pointed to the good news announced at council Monday that Walmart was expanding to include a new grocery store.
"I would suggest those kind of things don't happen unless developments like Husky happen," said Bater.