MEG Energy Corp. plans to invest $40 million (Canadian) toward growth projects during 2019. Growth capital includes approximately $20 million (Canadian) for the completion of work already underway on its Phase 2B Brownfield Expansion, which includes the addition of incremental steam capacity at the Phase 2B facility and two well pads. Production is anticipated to begin ramping up in the second half of 2019 to bring MEG's production to 113,000 bpd at the end of 2019. The company has spent $165 million (Canadian) to date on the project and continues to anticipate total costs for the Phase 2B Brownfield Expansion of approximately $275 million (Canadian).
In 2019, MEG will continue to deliver a significant portion of its blend sales to the U.S. Gulf Coast, where differentials have remained strong. With 50,000 bpd of firm capacity on the Flanagan South and Seaway pipelines, MEG expects to deliver over 30,000 bpd to the U.S. Gulf Coast, taking into consideration ongoing apportionment on the mainline system. The company anticipates apportionment to moderate on a full-year basis in 2019 relative to 2018, supported by increased crude by rail and the Alberta-wide production curtailments. The potential completion of Enbridge's Line 3 in Q4 2019 would provide further improvement to apportionment; however, a 2019 impact from Line 3 is not part of the base MEG planning assumption. MEG remains committed to diversifying markets through the use of rail. The company has rail capacity for 30,000 bpd and expects to rail over 20,000 bpd in the first quarter of 2019.
The company's 2019 spending is largely directed toward the completion and tie-in of sustaining wells. Given the advancement of a significant portion of a planned 2019 turnaround to November 2018, maintenance capital requirements for 2019 are relatively minor compared to the prior year.
For more information, visit www.megenergy.com or call (403) 770- 0446.