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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. Since acquiring the lease, we have carried out an extensive delineation program to determine the extent of the reservoir and better understand its physical characteristics.
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 is 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 1,800 barrel-per-day capacity 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 will 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 expects to test 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 is referred to as C2C-SAGD. The addition of solvents to the C‑SAGD process will also be evaluated as a longer term goal. Current operations at the pilot continue with optimization of C‑SAGD in both the C and D zones in addition to the first solvent injection and production cycle commenced in the P1C wellbore.
In September 2013 Laricina recorded monthly production of more than 1,000 gross barrels of bitumen per day from the pilot, reaching more than 300,000 gross barrels of bitumen of cumulative production by the end of the year at Saleski.
Laricina is looking beyond the pilot to commercial scale production from the Grosmont Formation. Engineering and regulatory information requirements for Saleski Phase 1 were submitted in December of 2010 to expand Saleski to 12,500 barrels per day production capacity. A project update to the application was submitted October 2012 to reflect the change from traditional dual-well SAGD design to C-SAGD. Regulatory approval for Phase 1 was received July 2013 with first production targeted for late 2017.
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.