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Fort Hills Oil Sands Project, Calgary, Alberta, Canada




Key Data


The Fort Hills project is an integrated oil sands project that includes a mine (approved in 2002 by Alberta Environment and the Alberta Energy and Utilities Board) and bitumen extraction facility, situated 90 miles north of Fort McMurray in Alberta (Athabasca oil sands region), Canada.

In addition, there will be upgrading facilities in Sturgeon County, 40 miles north-east of Edmonton (regulatory approval is expected in 2011).

Fort Hills is one of the largest remaining undeveloped oil sands leases in the Athabasca region.

The project is being developed by the UTS Energy Corporation (founder of the Fort Hills Energy Partnership) and has approval for the production of up to 190,000bpd of bitumen. The bitumen resource is estimated at 3.4 billion barrels and will be recovered by open-pit mining.

The project partners (Fort Hills Energy) originally included UTS (20%), mining company Teck Cominco (20%) and Suncor Energy (60%). UTS was responsible for expanding the scope of the project through a land acquisition programme and exploration.

"The Fort Hills first phase is expected to produce 140,000bpd of synthetic crude oil."

The acquisition included oil sands lease 437 and lease 438 on the east side of the Athabasca River and adjacent to the Fort Hills project (a total of 12,986 acres, which increases the project's land from 46,170 acres to 59,138 acres).

In July 2010, Total acquired the 20% stake held by UTS for C$1.5bn. In December 2010, Total and Suncor formed a joint venture to mutually develop the Fort Hills project.

The development will be carried out in two phases and is estimated to cost about $10bn.

The engineering and procurement contract will be awarded in 2011. The project is expected to come onstream in 2016.

Fort Hills first production

The Fort Hill project's first phase is expected to produce 140,000bpd of synthetic crude oil. The project will also produce bitumen (about 164,000bpd). The Sturgeon upgrader is also part of the Fort Hills project and will be developed alongside the bitumen project.

The size, staging and technology will be chosen to provide solid financial returns and minimise the execution risk.

Subsequent phases of the project are expected to give a total of 280,000bpd of synthetic crude oil with an expected 40 years of continuous operation.

Contractors for Fort Hill

In mid-2006 Technip was awarded a services contract including front-end engineering and design (completed in mid-2007), detailed engineering, procurement, construction and project management for the primary upgrader, to be constructed in Sturgeon County, Edmonton in Alberta, Canada (environmental impact assessment report filed in 2006).

The Fort Hills project will cost about $10bn."

The project installations include: a diluent recovery unit (DRU), a delayed coking unit (DCU) and related infrastructure. The DRU recovers solvent (naphtha) from the diluted bitumen piped from the Fort Hills mine site in Athabasca to the upgrader.

The DCU then upgrades the heavy bitumen into lighter hydrocarbons and then to synthetic crude through coke (carbon) extraction (the siting of the upgrader is close to a refinery in Edmonton). Technip conducted the project from its Rome base.

The Fort Hills upgrader will be situated in Sturgeon County near to an existing refinery.
The oil sands residue will be piped to the upgrader.
Construction of the Fort Hills upgrader is expected to begin in mid-2011.
The Fort Hills project has estimated reserves of over four billion barrels.
The Fort Hills project is expected to come onstream in 2016.
The upgrader will recycle the naphtha used as solvent to transport the bitumen.