CALGARY — The operator of one of Alberta's oldest thermal oilsands projects, shut down during the Fort McMurray wildfire in May, says it will remain closed until benchmark oil prices improve to above US$50 per barrel.
Executive vice-president Satoshi Abe says the 17-year-old Hangingstone project operated by Japan Canada Oil Sands Ltd. since 1999 was shut down as a precaution when staff were evacuated due to the fire.
He says there was no damage to the northern Alberta facility but the company has decided not to restart it for economic reasons. The money-losing project was built with capacity of 10,000 barrels per day to test the use of steam to produce bitumen from wells but had been producing only about half of that in recent years.
Meanwhile, Abe says construction continues on the company's nearby $1.8-billion Hangingstone expansion project which is expected to be completed by year-end. It's expected to begin producing bitumen by the middle of 2017 and gradually ramp up to capacity of 20,000 barrels per day.
The Alberta Energy Regulator recently reported provincial oilsands production in May dropped by about 25 per cent, mainly because of the wildfire and the resulting evacuation of about 90,000 people from the region.