Horizon Oil Sands Project – Developed by Canadian Natural Resou…

The Horizon oil sands project is being developed by Canadian Natural Resources. The project is located 70km away from north of Fort McMurray in the Regional Municipality of Wood Buffalo, Alberta, Canada (115,000-acre site leased from the Province of Alberta).

The CA$10.8bn phased development project is of one of the most significant energy resources in North America (the oil sands of Alberta contain an estimated 300 billion barrels worth of oil reserves). It was approved by Canadian Natural Resources in February 2005.

The first production of synthetic crude oil began in the third quarter of 2008 (110,000 barrels per day). The project includes a surface oil sands mining and extraction plant. Due to the large resource available, the mine and plant facilities are expected to produce for decades with crude oil production. The production life is anticipated to be more than 40 years.

At the plant site in early 2005, the test drilling was completed and the results further confirm the ore body definition to begin the mining operation (16 billion barrels of bitumen as the whole reserve with six billion recoverable with current technology). Further test drilling was carried out during the winter of 2006-2007 to determine more information about the deposit and this was completed by March 2007.

The 22km access road off Highway 63 leading to the Horizon site was also completed to Alberta government standards, and was paved in late 2005. About 5,000ha of land was cleared by mid-2005. Since that time, Canadian Natural has been working on several reforestation projects.

Expansion of the Horizon oil sands project has been divided into three broad phases which are phase 1, phase 2 including phase 2A and Phase 2B, and phase 3. Phase 1 has been subdivided into Tranche 1, Reliability (Tranche 2) and Directive 74.

Tranche 1 expansion was completed in 2007. It included engineering and design specifications for increasing production capacity, procurement of long lead equipment such as coke drums and reactors, and construction of additional coker foundations.

Reliability or Tranche 2 includes the construction of a third Ore Operation Plant (OPP3), hydro-transport, sulphur unit 3 and a 5,000 barrels per day increase in production capacity by 2013. Directive 74 includes the installation of equipment and tailings process required to meet new Energy Resources Conservation Board (ERCB) regulations. As of December 2012, Tranche 2 is 86% complete and Directive 74 is 16% complete.

Phase 2A includes coker expansion and debottlenecking. Phase 2B includes installation of a gas/oil hydrotreater, forth treatment and vacuum distillation units and a fourth OPP. Phase 2A will increase production capacity by 10,000 barrels per day by 2015 and Phase 2B will increase production by 45,000 barrels per day by 2016. As of December 2012, Phase 2A is 47% complete and Phase 2B is 8% complete.

Phase 3 expansion includes addition of supplementary extraction trains, and combined hydrotreater and sulphur recovery units. This phase is targeted to increase production capacity by 80,000 barrels per day in 2017. As of December 2012, Phase 3 is 8% complete.

Future phases of expansion will increase the production capacity to 500,000 barrels per day.

Synthetic crude oil production volumes in 2012 were approximately 86,000 barrels per day which was 113% higher than 2011. Annual synthetic crude oil production for 2013 is targeted to range from 100,000 barrels per day to 108,000 barrels per day.

Canadian Natural Resources and its contractors have made a commitment to hire qualified local people first, Albertans second and Canadians third.

Lead contractors include Fluor Canada, SNC Lavalin, Black & Veatch, Technip, AMEC and Noramac.