​MEG proceeding with $275M oilsands expansion

Image: Joey Podlubny/JWN

Work is underway on a new expansion of MEG Energy’s Christina Lake in situ oilsands project in northern Alberta.

The company is using cash injected from the February sale of its interest in the Access Pipeline and Stonefell Terminal to fund the 13,000 bbl/d project, known as the Phase 2B Brownfield Expansion.

Combined with a 20,000 bbl/d technology-based operations optimization program at Christina Lake that is currently underway, the $275 million Brownfield Expansion is expected to increase MEG’s production to 113,000 bbls/d in 2020, up from 93,207 bbls/d in the first quarter of 2018.

The company is not concerned about market access for the increased oil production volumes, since it already has capacity contracted for the growth on the Flanagan South and Seaway Pipelines from the U.S. Midwest to the Gulf Coast refining hub.

MEG reported net earnings of $141 million in the first quarter of 2018, up from $2 million a year before.