Fort Hills Oil Sands Project, Calgary, Alberta

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

The $10bn project also saw the upgrade of facilities in Sturgeon County, 40mi (64.3km) north-east of Edmonton.

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

The bitumen resource is estimated at 3.4 billion barrels and will be recovered by open-pit mining.

First oil at the Fort Hills project was achieved in January 2018.

Fort Hills project development

The project was originally developed by the founder of the Fort Hills Energy Partnership, UTS Energy Corporation, and has approval for the production of up to 190,000 barrels per day (bpd) of bitumen.

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 via a land acquisition programme and exploration activities.

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 was acquired during the initiative, which increased the project’s land from 46,170 acres to 59,138 acres.

Total acquired the 20% stake held by UTS in July 2010 for a sum of C$1.5bn.

Total and Suncor formed a joint venture (JV) to mutually develop the Fort Hills project in December 2010.

The current project partners include Suncor (53.06%), Total (26.05%) and Teck (20.89%).

Fort Hills first production

The Fort Hill project will have the capacity to produce 190,000bpd of synthetic crude oil upon reaching full production.

It is also producing bitumen at a rate of approximately 164,000bpd.

The Sturgeon upgrader is also part of the Fort Hills development and is being developed alongside the bitumen project.

The size, staging and technology were chosen in order 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.

Primary upgrader details

Fort Hills’ installations include a diluent recovery unit (DRU), a delayed coking unit (DCU) and related infrastructure.

The DRU recovers solvent (naphtha) from the diluted bitumen that is piped from the Fort Hills mine site in Athabasca to the upgrader.

It subsequently upgrades the heavy bitumen into lighter hydrocarbons and then to synthetic crude through coke (carbon) extraction.

The location of the upgrader is close to a refinery in Edmonton.

Secondary extraction project

Fort Hills’ secondary extraction unit was built at a cost of $3.1bn and includes a total of three trains.

The first train was commissioned in January 2018, while the remaining two trains are expected to commence operations in the first half of 2018.

The unit comprises 15 buildings, which are primarily used for further processing of bitumen.

Contractors for Fort Hill

Technip was awarded a services contract for the project in mid-2006, which covered front-end engineering and design, detailed engineering, procurement, construction and project management for the primary upgrader in Sturgeon County, Alberta, Canada.

Technip conducted the contracted works from its base in Rome, Italy.

Fluor was awarded the engineering, procurement, fabrication and construction contract for the project.

SK E&C was responsible for the secondary extraction project and subcontracted KBR to provide construction services.

Other contractors involved in the project were CH2M HILL, A&H Steel, Chemco, BFI Constructors, Mckay Concept and Ledcor Group.