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Saleski (like Germain) is located within the West Athabasca oil sands region and lies approximately 100 kilometres southwest of Fort McMurray, Alberta. The target zone is the Grosmont Formation, a dolomitized, shallow marine and tidal flat carbonate complex lying at a depth of approximately 325 metres. The Grosmont is characterized by extensive vertical fracturing, karsting and high permeability, i.e., excellent reservoir characteristics. The targeted horizons within the Grosmont Formation are the aerially extensive C and D zones, which have a combined gross pay thickness of over 40 metres.
The Saleski leases cover a total area of 17,152 gross hectares. Laricina holds a 60 percent working interest and is the project operator.
On July 22, 2009, Laricina received approval from the Alberta Energy Regulator (AER) (formerly the Energy Resources Conservation Board or ERCB) and Alberta Environment to proceed with the Saleski pilot. This was a huge milestone in Laricina’s development as it was the Company’s first project approval. On September 25, 2009, Laricina filed an amendment which proposed to add solvents to the base SAGD process. This amendment was approved by the ERCB on April 30, 2010. The addition of solvents will help to lower steam requirements while maintaining bitumen production rates, improving the steam to oil ratio.
Saleski is the world’s first carbonate project utilizing thermal horizontal well recovery processes to produce bitumen from Alberta’s Grosmont Formation. The purpose of the pilot was to allow Laricina to better understand the geological framework and technology necessary for commercial-scale, long-term oil recovery from the Grosmont. Interest in the Grosmont lies in the fact it is estimated by the AER to contain approximately 406 billion barrels of bitumen and is the second largest bitumen-bearing formation in Alberta.
The Saleski pilot consists of a central processing facility (CPF) with diluent treating and an adjacent well pad. The CPF consists of two 50MM BTU steam generators, associated water treating train, and a solvent injection / recovery system. The initial development started with steam only to promote steam chamber development in the Grosmont carbonate reservoir and to gather baseline temperature, flow and production information under a horizontal well thermal process. In later stages the pilot may test the injection of solvents with reduced steam to fully understand performance of the steam-solvent recovery scheme for commercial potential in the Grosmont.
Following the July 2009 approval of the pilot, Laricina completed detailed engineering in the fourth quarter of 2009 with construction taking place over 2010. Two of the well pairs were drilled into the D zone at 360 metres and one into the C zone at 377 metres. Steam injection commenced on December 22, 2010 with production from Alberta’s first thermal horizontal well Grosmont carbonate project in the spring of 2011. Two additional wells were drilled into the C zone early in 2012. In December 2013 a 700 metre sidetrack well was drilled in the Grosmont C zone, helping further refine reservoir understanding towards achieving commercial production rates. Following the success of this operation, a new generation well was drilled in the Grosmont D zone in April 2014, continuing to test and demonstrate production from the D zone.
The Saleski pilot has provided a clear picture on the unique character of the Grosmont, specifically the high permeability and rapid mobilization of bitumen. Initial development plans focused on traditional dual-well SAGD. However, with continued testing and evaluation, Laricina has determined that the best well configuration for commercial-scale start-up and recovery from the Grosmont is single horizontal wells using a C-SAGD process The Company believes future potential also lies in continuous steam injection at the top of the reservoir in later stages of production, to optimize overall recovery of bitumen from the rock. This later stage process has yet to be tested and is referred to as C2C-SAGD. The addition of solvents to the C‑SAGD process also requires evaluation and is a longer term goal.
In September 2015, Laricina suspended operations at the pilot. This action reflects the Company’s continuing efforts to implement cost controls towards maintaining its financial position to protect the long-term value of its assets. Since initiating first bitumen production in April 2011, cumulative gross bitumen production has been in excess of 600,000 barrels providing sufficient volumes to illustrate Laricina’s improved technical understanding and commercial viability of the reservoir.
Beyond the pilot, Laricina has advanced the first commercial-scale project, Saleski Phase 1 - a 10,700 barrel-per-day facility, to ‘construction ready’. Regulatory approval was received July 2013. Overall engineering is approximately eighty percent complete achieving a high level of engineering before construction begins ensuring cost efficiencies. Further efforts on the project have been put on hold until financing is obtained. The site has been properly preserved and two once-through steam generators that have been received are stored so that continuation of the project can be reactivated and completed when market conditions allow.
Further recovery techniques are being explored at Saleski to enhance the ultimate recovery rate. The stacked zones of the Grosmont carbonates are ideal for the use of Laricina's patented-heat harvesting technique, known as passive heat assisted recovery methods (PHARM). With a successful application of PHARM, heating the upper Grosmont D zone would generate incremental production from the lower zone, Grosmont C. Laricina expects this technique to further lower the steam to oil ratio for the project, thereby reducing water and natural gas requirements even more.