Following cancellation announcement, Koch filed application for 12,000 bbl/d SAGD project with Pengrowth
In a letter to Alberta Energy Regulator, Koch Oilsands Operating ULC has requested the approved Muskwa SAGD project be rescinded before Dec 3. The 10,000 bbl/d project received regulatory approval in June 2014.
“KOSO does not believe the current nor medium term economic environment in Alberta will provide opportunity to generate an adequate return on the required capital for construction of the Muskwa SAGD project,” said Bryon Lutes, VP of Business Development.
Lutes letter also stated the project would be “burdened with regulatory uncertainty around the Climate Leadership Program and its potential impacts from Carbon Tax to the emissions cap” both recently legislated by the Alberta Government.
Following the cancellation was an announcement this week Koch filed an application for a 12,000 bbl/d SAGD project with Pengrowth Energy Corp, according to JWN Energy.
“This is just the latest example of NDP policies making a bad situation worse for Albertans,” Wildrose Leader Brian Jean said. “The NDP want to blame the price of oil, but the fact is capping emissions and implementing a carbon tax is bad policy that only hurts Alberta over the long-term.”
The letter also stated Koch will keep the leases in good standing with the Alberta Energy Regulator and continue with any regulatory requirements on the lease.
The Koch project is not being outright abandoned, as the letter says the company “will monitor the economic and regulatory climate over the next several years for any improvements that may justify a re-submittal of an in-situ scheme application.”