Oil and gas producer Husky Energy has started steam operations at the 10,000 barrels per day (bbls/day) Vawn Lloyd thermal project in Saskatchewan, Canada.
Expected to produce first oil in the third quarter of this year, the Vawn development represents the company’s second of three thermal projects scheduled for commissioning this year.
Husky Energy CEO Asim Ghosh said: "We are ahead of schedule and under budget with Vawn, an indication of our growing expertise in developing these thermal projects.
"These developments are leading our transition into a low sustaining capital business, with among the lowest operating costs in the industry."
In April, Husky has commenced production at the 10,000 bbls/day Edam East heavy oil thermal project in Saskatchewan, Canada.
The firm plans to commence production from the third project 4,500 bbls/day Edam West in the third quarter of 2016.
Husky Energy expects the Edam East, Vawn and Edam West projects to add about 24,500 barrels of new production by the end of this year.
The company plans to increase its heavy oil thermal production to about 80,000 bbls/day by the end of 2016 from about 18,000 bbls/day in 2010.
The firm uses recovery methods including predominately cold heavy oil production with sand (CHOPS) and horizontal well technology for its heavy oil operations.
The latest announcement comes a day after the firm signed an agreement to divest C$595m ($461m) worth of assets in southwest Saskatchewan to oil and gas firm Whitecap Resources.
Image: Husky Energy intends to increase its heavy oil thermal production to about 80,000 bbls/day by the end of 2016. Photo: courtesy of Husky Energy Inc.