MARKING its third thermal project to be brought online this year, Husky Energy has commenced steam operations at the 4,500 barrels per day (bbls/day) Edam West Thermal in Saskatchewan.

Husky said the 10,000 bbls/day Edam East Thermal project, which achieved first oil in April, is now producing above its design rate at about 11,000 bbls/day.

At the 10,000 bbls/day Vawn development, first production has started about six weeks after steaming began.

Husky chief executive Asim Ghosh said the start-up of steam operations is a significant step for the company’s transition towards higher quality production.

“Thermal technology has turned our heavy oil business into a resilient growth engine, with some of the lowest operating costs in the industry at about $7 per barrel.”

“And we have room to grow even further with another 18 thermal projects ready for advancement.”

Husky said it is leveraging its growing thermal expertise at the Tucker Thermal project near Cold Lake, Alberta, where production is about 22,000 bbls/day.

Combined production from Lloyd thermals and Tucker is 85,000 bbls/day, expected to rise above 100,000 bbls/day later this year.

More than 40 per cent of Husky’s overall production is expected to come from low sustaining capital projects including thermal projects in 2016, compared to 8% in 2010.

Husky said its thermal business is supported by its integrated downstream operations.

The Lloyd value chain originates with the company’s extensive resource in the Lloyd area and includes the Saskatchewan gathering system, the Upgrader and Asphalt refinery, and oil storage capacity at Hardisty, Husky said.