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MEG – The Greening of Black Gold

July 31, 2008

MEG Energy Corp. (MEG) is a private corporation based in Calgary, Alberta focused solely on oil sands development in the southern Athabasca oil sands region. MEG owns a 100% working interest in over 700 square miles of oil sands leases, with its principal asset being 80 contiguous square miles in the Christina Lake area of Alberta, which form the basis of MEG’S Christina Lake Regional Project. The project is located centrally among the main “in situ” oil sands developments, and is estimated to contain over six billion barrels of bitumen in place. Naturally occurring crude bitumen is the prime feed stock for petroleum production from tar sands. Due mainly to oil price increases, upgrading bitumen to synthetic crude oil has become highly profitable. Crude bitumen, however, is a sticky, tar-like form so thick and heavy that it must be heated or diluted before it will flow. MEG had an answer in lieu of the typical open pit means of collecting the bitumen: Steam Assisted Gravity Drainage, otherwise known as SAGD.

SAGD involves drilling pairs of horizontal wells at a depth of about 350 meters below the surface. The upper well is the steam-injection well and the lower well, approximately five meters below, is the bitumen-production well. Steam is produced from collected non-potable underground water, and is continuously injected through the upper well bores, creating steam chambers that heat the bitumen formations. The heated bitumen, under the influence of gravity, then drains to the lower wells and is produced to the surface. The wells are drilled from common surface pads minimizing land disturbance. No surface water is used, and 90% of the water used is recycled, resulting in low environmental impacts. Further to this, where practical, all produced gases are collected to reduce emissions and to be reused for steam generation. The SAGD process allowed the Alberta Energy and Utilities Board to increase its proven oil reserves to 179 billion barrels, which raised Canada’s oil reserves to the second highest in the world after Saudi Arabia, and approximately quadrupled North American Oil Reserves.

With the myriad of technical equipment and expertise required to successfully design and build an operating and functioning system for such a project, a clear and concise understanding of how every component functioned was needed to determine exactly how the structure could be economically designed and built around this very same equipment. Colony’s Shawn Lochbaum was up for the task.

“Shawn applied a solution-based approach to problem solving,” spoke Heather Cody, Worley Parsons MEG’s Contracts Administrator for the project. “I think Colony’s contribution to the project, in terms of advice, or whatever else, was useful and certainly appropriate,” confirmed Bruce McCarty, Construction Manager Growth Projects for MEG Energy. “Shawn was always very accommodating,” Heather continued, “he responded very quickly to any requests for clarification, whether the issue at hand was commercial or technical.”

This project is groundbreaking in its ability to produce the oil we all need at a reasonable cost, while working in contiguous harmony with environmental needs and issues. We applaud MEG Energy for their innovative and forward-thinking methods. When you consider that Canada contains most of the world’s supply of natural bitumen, you can understand how development of methods that can tap that resource with very little impact to the environment are so important to our country, our economy, and our people.

© 2008, Colony Management Inc..
www.colonybuildings.com

MEG – The Greening of Black Gold
Posted by Colony Management on Thursday, July 31st, 2008


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