Terre de Grace
The Terre de Grace lease area consists of over 290.5 square miles. Located 36 miles (60 kilometers) northwest of Fort McMurray, the Terre de Grace property is one of the largest contiguous oil sands blocks in the Alberta Oil Sands suitable for in-situ oil sands development. In March of 2010, VCI and BP formed the Terre De Grace Partnership (“TDGP”) to exploit this large resource. VCI holds 25% the Terre de Grace Partnership with BP holding the remaining 75% interest and acting as the contract operator, managed by a joint Governance Committee.
As part of the arrangement, BP provides sufficient working commitment contributions to carry VCI’s interest for the first commercial development and cash flow. Additional contributions are to be made by BP with further definition of the resource base for development.
Regulatory approvals were obtained for a 2,000 to 10,000 barrels per day pilot project. The TDGP is reviewing development plans while continue with resource assessment work including oil sands exploration drilling and seismic.
The development timing, production capacity, and recoverable resources for the total Terre de Grace block will be confirmed as development plans progress and further delineation drilling and interpretation continues over the next few years.
The SAGD Process
TdGP is planning to deploy the Steam Assisted Gravity Drainage (SAGD) process to exploit the Terre de Grace bitumen resources. The schematic shows an array of horizontal well pairs for recovering the highly viscous (thick, sticky) bitumen from the Athabasca oil sands.
The SAGD process involves pairs of horizontal wells drilled from the surface. The injector well is generally placed parallel to and about five metres above the producer well. The producer is placed three metres offset from the base of the bitumen formation. The wells are usually spaced about 100 metres laterally apart.
SAGD is the leading economically viable, field-proven, in situ thermal recovery technology for recovering bitumen resources that are too deep for surface oil sands mining. SAGD operates at below reservoir fracturing pressure at all times. The steam introduced at the upper injector well spreads upward and outward, while the bitumen with lowered viscosity due to increased temperature is continuously drained by the lower producer.