Page 9 - NorthAmOil Week 49

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Suncor forecasts 2020 production increase
CANADA
Suncor has complained of the “disproportionate” impact production curtailments have had on its Fort Hills and Syncrude projects.
CANADIAN producer Suncor Energy has forecast that its oil output will rise by 5% in 2020, despite uncertainty relating to mandatory production curtailments imposed by Alber- ta’s provincial government. The curtailments are currently due to run until the end of 2020, but may yet be extended further, and their ulti- mate impact on Alberta’s production remains unknown.
However, the Alberta government said in late October that it would allow producers to exceed their output caps from December as long as the incremental production was shipped to market by rail. Suncor was among the companies that publicly welcomed this development. Suncor’s CEO, Mark Little, said at the time that his com- pany would work to fill its currently contracted capacity of 30,000 barrels per day (bpd) on rail “in the next month or two”.
It is thus perhaps unsurprising that Suncor subsequently said last week that its 2020 output was expected to be 800,000-840,000 barrels of oil equivalent per day (boepd), which would be a 5% increase over the midpoint of its 2019 forecast.
The company also said it anticipated its 2020 capital spending would be CAD5.4-6.0bn
($4.1-4.5bn), with investment into oil-related projects expected to be flat year on year. Little noted that the company would continue to focus on “value over volume, investing in high-return projects that are largely independent of pipeline constraints and commodity price volatility, to deliver on our CAD2bn [$1.5bn] incremental freefundsflowtargetby2023”.
The company noted that its Fort Hills and Syncrude projects remained adversely affected by the “continued, disproportionate effect of curtailment as it is applied on a 2018 production basis when neither asset was operating at name- plate capacity”.
In the spotlight
Additional crude-by-rail shipments out of Alberta are likely to attract more attention after a Canadian Pacific Railway (CP) train carrying crude derailed in Saskatchewan on December 9. The derailment caused a fire west of Guern- sey, but no injuries or damage to buildings were reported, and no evacuations ordered.
The Transportation Safety Board of Canada (TSB) said it had deployed investigators to the site to assess the impact of the incident.™
Freeport LNG marks milestones
TEXAS
MCDERMOTT International, Chiyoda Inter- national and Zachry Group, the engineering, procurement and construction (EPC) con- tractors on the Freeport LNG export project in Texas, have announced two milestones on the development of the terminal.
On December 6, the contractors said Train 2 at Freeport had started producing LNG. They added that Trains 2 and 3 at the facility were being started up on schedule, with initial pro- duction from Train 3 due in the first quarter of 2020. Start-up of the facility’s trains has previ- ously been pushed back owing to delays relat- ing to flooding from Hurricane Harvey, among other factors. All three trains had initially been scheduled to enter service in 2019.
Days after the announcement about pro- duction from Train 2, on December 9, the contractors stated that the operator of the facility – privately held Freeport LNG Devel- opment – had started commercial operation of Train 1.
“The past few months have brought signifi- cant accomplishments for Train 1 of the Freeport
LNG project – starting with introduction of feed gas in July, first liquid in August, shipment of first cargo in September and now commercial operation,” McDermott’s senior vice-president for North, Central and South America, Mark Coscio, said in a statement.
Zachry, the joint venture lead, partnered with McDermott for the pre-front-end engineering and design (pre-FEED) on the project in 2011. This was followed by FEED works to support the early development stage of Freeport LNG. Chiyoda later joined the partnership for work related to Train 3.
The project scope includes three pre-treat- ment trains, a three-train liquefaction facility, a second loading berth and a 165,000 cubic metre full containment LNG storage tank.
Each train at Freeport has the capacity to pro- duce around 5mn tonnes per year (tpy) of LNG. The company has received approval from federal regulators to build a fourth train at the facility, and said in September that it was targeting a final investment decision (FID) on that train in the coming months.™
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