Japan Petroleum Exploration Co (Japex) plans to increase output at its Canadian oil sands project by more than four times, as it looks to cater to growing demand for the fuel by refineries in the U.S.
In a supplementary presentation released by Japex, the company revealed that capacity at its Hangingstone facility will be expanded to 30,000 barrels of heavy crude oil per day from its present production capacity of 6,000 to 7,000 barrels per day. Heavy crude oil is also commonly known as bitumen.
The facility, to be expanded in two phases, will cost $1.4 billion (CAD 1.4 billion). The expanded unit is expected to start pumping oil in the first half of 2016.
Japex is considering the possibility of developing other oil sand leases – including those of Chard, Corner and Thornbury – as it is keen to develop this segment of the oil market as one of its core businesses, the company said in a statement.
The project, in which Nexen owns a 25 percent stake and Japex the rest, applied in 2010 for regulatory approval to expand capacity. China’s CNOOC successfully completed its purchase of Nexen, for $15.1 billion, earlier on Dec.8; meaning that the Chinese giant is now part-owner of the Canadian oil sands project.
Japex plans to finance its portion in the project – costing $1.1 billion – through its own funds and bank loans, while Nexen will take a final decision on the investment in early 2013.
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