Suncor Considering Supply Alternatives to Major Oilsands Mine

Suncor Energy said on Wednesday it is considering other alternatives to replace roughly 200,000 barrels per day of raw bitumen production at its biggest oil sands mine, expected to run out by 2030.

About 350,000 barrels per day of high-value synthetic crude is produced at Suncor’s Base Plant in northern Alberta, which receives its supply from Base Mine, located north from the oil sands hub of Fort McMurray.

Last year, the federal government warned Suncor Energy that its original proposal to prolong Base Mine would not pass the environmental assessment as predicted carbon emissions were too high, creating a political roadblock for the company’s efforts to replace the declining reserves.

In a conference call with analysts, Suncor’s interim CEO Kris Smith said that the company is still working on a regulatory application for the extension project and is also exploring other alternatives.

The company is working on many projects in the area near Base Plant, including thermal oil sands developments, an expansion of its Firebag project, and an increase in supplies from its Fort Hills mine, which is connected to Base Plant through a 40,000 barrel-per-day pipeline.

“It’s too early to call in terms of which horse is in the lead race but those options are being worked very hard,” said Smith.

Last October, Suncor agreed to buy a larger stake in the Fort Hills oil sands mine from Teck Resources, which analysts said was a sign the company was looking for alternatives to upgrading Base Mine. Base Mine.

Regarding future oil and gas projects in Canada that need a federal impact assessment, the government recently published draft guidance on ensuring “best-in-class” emissions intensity.

According to Greenpeace Canada’s senior energy analyst Keith Stewart, if Suncor can obtain new reserves to supply the upgraders from current operations like Fort Hills or Firebag, then the company could avoid conducting an impact assessment.

Suncor, according to Smith, is focused on determining the most cost-effective means of keeping the upgraders full. He said that over the next 2 years, the company anticipates adopting one of the alternatives.