The recent Cenovus Energy turnaround at the Lloydminster Upgrader is being considered historical.
It was the first topic noted by Cenovus president and CEO Jon McKenzie during a second-quarter conference call on Aug. 1.
“We completed the largest turnaround in the history of the Lloydminster Upgrader,” said McKenzie.
The Upgrader has since completed its ramp-up to normal rates and is operating steadily following the turnaround from the first week in May to the first week in July.
“In addition to regulatory maintenance during the turnaround, we also implemented seven large projects at around $50 million of capital spend that enable us to further enhance reliability at the asset,” said McKenzie. “It includes advancing the automation of our systems.”
McKenzie noted the turnaround was completed with approximately one million man-hours in a peak mobilized workforce of about 3,200 contractors.
“Our planned 49-day turnaround was done with no incidents,” he said.
“Safety and operational execution of the turnaround was outstanding amid some of the weather-related delays that impacted productivity and the schedule by about a week and elevated the overall cost.”
The Lloydminster refinery results in the quarter were also impacted by the turnaround at the Upgrader.
Cenovus has also been dealing with several wildfires recently across northern Alberta with some near its oilsands sites including Sunrise near Fort McMurray.
“With the recent rainfall and firefighting efforts we’re in a better place,” said McKenzie. “We have now returned all our staff to the Sunrise site and all of our assets continue to operate at normal rates.”
Cenovus has also announced it achieved its new debt target of $4 billion in July and is now moving to return 100 per cent of excess free funds flow to its shareholders.
“It really sets the stage for continued growth in our shareholder returns over time,” said McKenzie.
Cenovus’ upstream business continued to deliver strong operating results in the quarter with production of over 800,000 barrels of oil equivalent per day (boe/d) in line with the prior quarter.
“Production for the first half of 2024 continues to trend at the higher end of our guidance range,” said McKenzie.
The company expects to exit 2024 well above 800,000 boe/d following a planned turnaround at Christina Lake in September.
In the second quarter, Cenovus also loaded its first vessels at the Westridge Marine Terminal following the successful startup of the Trans Mountain pipeline expansion (TMX).
During the question period, McKenzie said the construction, commissioning and running of the TMX pipeline is a great day for Canadians when asked to describe the impact of TMX on the industry and Alberta and if it’s worthwhile to Canadian taxpayers being well over budget.
TMX was completed in the quarter at an estimated cost of $34 billion.
“Admittedly, it was over budget and it was more expensive than it needed to be,” said McKenzie.
“That being said, this will generate a huge amount of revenue for Canadians in the form of royalties and tax dollars that go towards the public purse and in my view will increase the standard of living for all Canadians, so the short, medium and long term this is a great asset for Canada and is an important piece of infrastructure for the country.”
Read More: Cenovus invests in Lloydminster assets
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