Shell makes final decision for Carmon Creek Project
After the joint venture Suncor-Total which decided to proceed with their multibillion Fort Hills oil sands mining project in Athabasca region, Shell is making the final investment decision (FID) with its Carmon Creek oil sands project in Alberta.
The two mega projects, by their size and new technologies involved supported by major companies such as Shell or Total, give the green light for a new wave of exploration – production campaign in Alberta.
While USA is ramping up its production of shale oil promising to beat previous peaks of production every year, Canada cannot stand still any longer and has to move ahead to sustain its economical growth.
Shell Carmon Creek Project is located in the Peace River area about 400 kilometers northwest Edmonton in Alberta.
Shell operates Peace River oil sands since 1979 with a production currently running between 8,000 and 9,000 barrels/day.
Shell drilling rights in Peace River area cover 40,000 hectares out which the Carmon Creek project should cover only one third.
Acting as the operator, Shell is the solely owner of these rights in Peace River and the Carmon Creek project.
With the Carmon Creek project, Shell intends to produce 80,000 b/d, a bit less than the first goal set in 2009 at 100,000 b/d.
By reference to similar projects in the region, Shell capital expenditure for the Carmon Creek should range between $3 billion and $3.5 billion depending on how is considered the power plant associated to the project.
Shell Carmon Creek to include cogeneration plant
To supply the power to the Carmon Creek project, Shell is due to build power generation facilities.
But in respect with the limited capabilities to the local grid to feed the Carmon Creek project, Shell and the local authorities have decided to design the Carmon Creek Power Plant with 630 megawatt (MW) capacities.
With this combined cycle power plant (CCPP), Shell will reduce the CO2 emissions and will be able to deliver up to 500 MW to the local grid.
In April 2013, Shell received the regulatory approval from the Energy Resources Conservation Board (ERCB) in recognition of all Shell efforts to reduce the environmental impact and the odors emissions of these upstream activities.
In Carmon Creek, Shell will deploy 13 well pads with each well pads running 50 vertical wells.
These wells pads will be decommissioned regularly one by one as soon as the production of these pads will end after some 10 to 15 years and the area will be reclaimed to original.
During the first two years, Shell will proceed by cyclic steam stimulation (CSS).
With this in-situ technology, the steam is injected by cyclic shots leaving the oil to flow out freely then.
Each injector well will be surrounded by six producer wells.
On the environmental aspects, the processing facilities will
– Recycle the water used for the CSS
– Remove the hydrogen sulfide gas (H2S) from the bitumen
– Eliminate sulfur dioxide emissions
– Capture all the sources of vapors and related odors along the process as requested by the Alberta Energy Regulator
The Carmon Creek project will include:
– Wells pads
– Steam distribution pipelines system
– Oil and gas and other fluids pipelines gathering system
– Cogeneration plant
– Water treatment plant
With the construction starting, now, Shell expect to start first production in Carmon Creek in 2017 and to reach the plateau production in the following two years.