Grand Rapids, about 300 kilometres north of Edmonton, is expected to eventually produce 180,000 barrels of oil per day over multiple stages.
Cenovus says it's been encouraged by production results at a pilot project at the site that uses steam-assisted gravity drainage technology to extract the bitumen.
It says it'll decide on the timing of the project later this year.
Cenovus is already active in the area and says it can cut costs by using existing roads, power sources, camps and other infrastructure.
The company has interests in two steam-driven oilsands projects — at Foster Creek and Christina Lake in northeastern Alberta — that together produce 240,000 barrels of oil per day.