AEC initiates site construction for Steam-Assisted Gravity Drainage project

Alberta Energy said that site construction for its $ 230 mm Steam-Assisted Gravity Drainage (SAGD) heavy oil project has been initiated following the recent regulatory approval from the Alberta Energy and Utilities Board (AEUB) and Alberta Environment.
The Foster Creek thermal recovery project, located in the centre of the Primrose Air Weapons Range, will be AEC's first commercial use of the steam- assisted gravity drainage technology to tap the vast heavy oil resources located under the Range. This initial phase is expected to recover reserves of 140 mm barrels. Initial production of more than 20,000 bpd is expected to commence in early 2002. Subsequent expansions that could build total daily production to 100,000 bpd by 2006/2007.
The AEUB issued its regulatory approvals on June 15 following a lengthy public consultation process with environmental groups and local communities. While some individuals and groups expressed some concerns about environmental aspects such as groundwater and airquality, the process also earned the Company compliments regarding the project's extensive Environmental Impact Assessment.

AEC's midstream division is also proceeding with its plans to develop a $ 45 mm, 52 km pipeline system to deliver the Foster Creek production to AEC Pipelines' Wolf Lake Pump Station south of the Primrose Range. The parallel pipelines include a 10-inch diluent supply to the Foster Creek site, and a 24-inch, heavy oil blend pipeline from the Foster Creek project to Wolf Lake.
This provides product access to AEC's Cold Lake Pipeline to Edmonton. It is anticipated that more than 80 % of the $ 230 mm project cost will involve Alberta-based contractors and suppliers.

High-impact growth has created one of North America's largest independent oil and gas companies. AEC ranks first in natural gas production in Canada, and fifth among independent producers in North America. AEC is also a major gas storage developer and a pipeliner of conventional, synthetic and heavy oil in North America.
AEC's vision is to build a "global super-independent", with growing international investments including Ecuador, Argentina, Australia, the United States, and the Caspian Sea.
AEC's disciplined adherence to its "Growth, Value, Performance" business strategy has resulted in a Company with an enterprise value of approximately C$ 12 bn.