SURMONTPROjecT OveRview
OUR cOMMiTMeNT MEG is committed to developing our oil sands projects in a responsible and safe manner. Our public consultation process is designed to include local communities and stakeholders in project planning and implemen-tation. We strive to address concerns and incorporate feedback into our project designs. Your feedback is important to us.
Table Of cONTeNTS 02 Our commitment
05 who we are
05 Our Oil Sands leases
07 Recovery Technology
08 Surmont Project Overview
09 Project Schedule
11 MeG and the environment
14 MeG and the community
02 SURMONT Project Overview 03SURMONT Project Overview
05SURMONT Project Overview
Christina Lake ProjectPhases 1 & 2
04 SURMONT Project Overview
whO we aRe
MEG currently owns more than 900 sections of oil sands leases in the Southern Athabasca oil sands region.
OUR Oil SaNdS leaSeS
MEG Energy Corp. (MEG) is a Canadian oil sands company focused on sustainable in situ development and production in the Southern Athabasca oil sands region of Alberta.We use steam-assisted gravity drainage (SAGD) in our operations. Currently, MEG has one operating project in the Christina Lake region, located northeast of Conklin, Alberta. The Christina Lake Project is a multi-phased development currently designed to produce approximately 25,000 barrels per day (bpd).
Schematic only, not to scale
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RecOveRy TechNOlOGy
06 SURMONT Project Overview 07SURMONT Project Overview
MEG uses in situ techniques to extract bitumen from the oil sands. In situ extraction methods may be used when the oil sands are located more than 75 metres deep. They do not require tailings ponds.
MEG uses a technology called steam-assisted gravity drainage (SAGD) to recover the bitumen. In SAGD operations, pairs of stacked horizontal wells are drilled into the oil sands reservoir located deep underground. At our Surmont Project, the wells are approximately 250 metres beneath the surface.
The bottom well, called the production well, is drilled approximately three to five metres above the base of the bitumen. The top horizontal well, the steam injection well, is drilled five metres above the lower well. The top well injects steam into the reservoir, heating up the bitumen so it separates from the sand and flows down into the lower well with the water from the steam. The production well pumps the bitumen to the surface, where it is separated from the water. The water is treated and recycled into the system.
Horizontal wells are able to reach hundreds of metres underground, which means the vegetation and wildlife on much of the surface is not disturbed at all.
How MEG extracts oil from its leases
SurmontProject area
christina lakeProject
08 SURMONT Project Overview
SURMONT PrOject OvervieW
Project location
RecoveryTechnology
facilities
Status
Project life
09SURMONT Project Overview
Mid-2012Submit integrated application
late 2014Anticipated construction start
late 2016 First-steam date
OngoingPublic consultation
Key daTeS
PROjecT SchedUle
Public Consultation
Operations
Site Prep & Construction
Regulatory Review
Planning, Design & Engineering
Submit Integrated Application
Initial Planning &Application Development
year 2011 2012 2013 2014 2015 2016 2017
ReGUlaTORy PROceSS
Within portions of Townships 81-82, Range 5
W4M, 80 km south of Fort McMurray
SAGD in the McMurray Formation
Steam generation, cogeneration, water
treatment and recycling, bitumen treatment,
sulphur recovery, multi-well production pads,
steam delivery pipelines, product recovery
pipelines, water source wells, wastewater
disposal, construction and operations camp
and other secondary infrastructure
Environmental and engineering studies
in progress in preparation for filing of the
regulatory application
Approximately 25 years*
MEG is proposing to develop an in situ project on its Surmont leasesin the Southern Athabasca oil sands region of Alberta.The Surmont Project falls within portions of Townships 81-82, Range 5 W4M, 80 kilometres south of Fort McMurray. This area has been extensively explored and developed for natural gas projects, and more recently for oil sands resources. Other thermal recovery projects are already operating in this area. MEG’s Surmont Project includes a planned capacity of approximately 120,000 bpd.* The project will be built in phases and will feature SAGD recovery of bitumen from the McMurray Formation.
MEG is committed to engaging in a constructive dialogue with the regulatory agencies, communities and individuals in the project area to achieve an environmentally responsible and economically feasible project.
Our goal is to submit a commercial project application to the Energy Resources Conservation Board (ERCB) and Alberta Environment and Water (AEW) for review in mid-2012 for approvals under the Oil Sands Conservation Act, the Environmental Protection and Enhancement Act and the Water Act. This application will include a complete Environmental Impact Assessment (EIA). Input from local communities will assist in planning and completing the EIA.
Applications will also be made to the Alberta Utilities Commission (AUC) for the cogeneration facilities and to Sustainable Resource Development (SRD) for the surface dispositions required for the project components.
For additional information on the regulatory process, please visit www.ercb.ca or www.environment.alberta.ca.
Anticipated Regulatory Approval
*
* Production rates, the project schedule and project life may vary as the size and pace of development is dependent on a number of factors, including the timing and terms of regulatory approvals, the implementation of improving technology, the phase sizes and various other factors.
10 SURMONT Project Overview
In total, the surface footprint associated with SAGD operations like the one planned for Surmont, is minimal.
In fact, MEG’s current SAGD facilities at Christina Lake use only 10-15% of the land surface of a lease.
11SURMONT Project Overview
OUR GOal To meet or exceed environmental protection standards within our industry by exercising a standard of care in all of our activities that considers:
1 Environmental Protection
2 Regulatory Requirements
3 The Interests of the Communities
MEG is committed to developing its projects in an environmentally responsible manner. We pride ourselves on taking a proactive approach to implementing technology, programs and procedures that not only mitigate our environmental impact, but also create positive outcomes for current and future generations.
MeG anDthe envirOnment
COGENERATION PROCESS
NaturalGas
GasTurbine
Heat RecoverySteam Generator
Electricity
80% 20%Steam Recycled Water
COGENERATION
SAGD OPERATIONSAlberta ElectricalGrid
Produced Bitumen
waTeR Steam is a key component of SAGD operations. In all of our projects, MEG sources the water needed to produce steam from non-drinkable sources located deep under the ground.No surface water will be used to operate the SAGD facilities. MEG aims to recycle more than 90% of the water it uses. Make-up water is planned to be accessed from the Clearwater and McMurray Formations. Because of their depths, water used from these formations will have minimal environmental impact.
At MEG, we design our projects to reduce impacts on wildlife by minimizing our overall footprint and progressively reclaiming disturbed areas.
Designing our projects in this manner reduces impacts such as soil erosion and also enhances the early restoration of wildlife habitat. MEG also supports regional biodiversity and wildlife monitoring programs in the areas where we operate.
wildlife
12 SURMONT Project Overview 13SURMONT Project Overview
eNeRGy & eMiSSiONS MEG is committed to building energy-efficient facilities that minimize emissions. One of the ways MEG demonstrates this commitment is through the use of cogeneration in our operations.
cOGeNeRaTiON Cogeneration is a progressive technology which simultaneously produces steam and electricity. This process allows MEG to produce two energy products, bitumen and electricity, from one energy source, natural gas.
With the benefits of cogeneration and low steam-to-oil ratios, MEG produces one of the lowest intensity greenhouse gas barrels in the oil sands industry.
laNd & ReclaMaTiON The surface footprint of SAGD operations is minimal.
Schematic only, not to scale
Water Source
Potential water Source and disposal
WaterSource/Disposal
Throughout the planning and development process, MEG considers both scientific and traditional knowledge in the design of the project. Locations of water bodies, rare plants, wildlife habitats and historically or ecologically significant lands are considered. The Surmont Project will be designed to use multi-well pads and shared utility corridors where possible, to reduce land disturbance and related environmental impacts.
As operations are completed, MEG will use progressive reclamation techniques. In this process, disturbances are reclaimed once they are no longer required for the project. Topsoil, subsoil and peat materials are carefully preserved for reclamation. The reclamation process begins as well pads, pipelines and roads are retired. This minimizes the surface footprint over the project’s life.
Clean natural gas is used in our operations to efficiently produce electricity. The excess heat created when producing this electricity is utilized to produce steam. MEG uses the steam and power for its production operations and provides excess electricity back to the Alberta electrical grid.
The electricity provided back to the power grid has a lower carbon footprint than the provincial average, helping to reduce total greenhouse gas emissions. Wildlife photographed at MEG’s Christina Lake Project
14 SURMONT Project Overview
OUR PeOPle MEG is a proud Canadian corporation. We have attracted an enthusiastic and dedicated group of employees with significant oil sands development experience. Many people on the MEG team have been responsible for, or have participated in the development of several of the original oil sands projects in Alberta. MEG employs people from the local community who are able to develop new skills and bring a communal spirit to help MEG achieve its long-term commitment of sustainable development. MEG gives high priority to stakeholder relations, environmental stewardship, health and safety and providing community benefits. MEG’s intent is to minimize the impact on the natural surroundings and its neighbours and to ensure continued compliance with regulatory requirements.
MeG anD the cOmmunitYMEG recognizes the importance of effective and transparent communication with directly affected stakeholders to ensure a project’s social, environmental and economic sustainability. It’s a priority for MEG to develop positive, long-term relationships with our stakeholders.
15SURMONT Project Overview
cONSUlTaTiON During the development of the EIA and throughout the regulatory approval process, we will consult with people from the local area to ensure there is an awareness and understanding of the project, as well as an opportunity to provide feedback.
Consultation will be undertaken for the EIA and Integrated Application, including the AUC application and applications to SRD for surface dispositions. MEG will focus on seeking input related to project-specific concerns and potential impacts. We will also strive to incorporate Traditional Environmental Knowledge and Traditional Land Use information in all phases of our project planning and operations. This consultation is designed to be ongoing from the application phase, through the operating life of the project, to eventual decommissioning and reclamation.
lOcal iNvOlveMeNT In addition to involving local people in the regulatory and planning process, MEG will require appropriately qualified people for both the construction and operations of the Surmont Project.Local hiring will be encouraged where qualified candidates are available. Services and supplies will be obtained locally, where possible.
Rory O’ConnorManager, Community Relations11th Floor, 520 – 3rd Avenue S.W.Calgary, AB T2P 0R3P: 403-775-1853E: [email protected]
www.megenergy.com
For additional information, please contact:
Publication Date: March 2012