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Proposed Diluent Recovery Unit

Cenovus Energy is evaluating the potential to build a diluent recovery unit (DRU) at its Bruderheim oil transloading facility, northeast of Edmonton. The Bruderheim Energy Terminal currently has capacity to load and ship approximately 100,000 barrels of oil per day. We’re in the process of increasing capacity to 120,000 bbls/d. Cenovus currently ships dilbit (diluted bitumen) produced at its oil sands operations in northern Alberta through the Bruderheim Terminal. Dilbit consists of approximately 70 percent raw bitumen blended with approximately 30 percent diluent (a light hydrocarbon), which is added to reduce the viscosity or thickness of the bitumen so that it will flow in a pipeline. With the addition of a DRU to remove the diluent prior to rail loading, Cenovus has the opportunity to significantly increase its overall capacity to ship valuable bitumen to market, while also eliminating the cost of transporting the diluent to and from the company’s end markets.

A DRU is a relatively simple distillation unit that uses heat to separate dilbit essentially into its core components - undiluted bitumen and diluent. At this proposed facility, we would be producing a new product that we will call Lamont HeavyTM, which is an undiluted heavy crude oil. Lamont HeavyTM would be transported via rail car to refineries on the U.S. Gulf Coast, while the diluent removed in the DRU process would be shipped directly back to Cenovus’s oil sands operations for reuse.

DRU
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More information

The proposed location for the primary DRU facility is a 64-hectare site adjacent to the existing Bruderheim Terminal, which is located about two kilometres southeast of Bruderheim and 50 kilometres northeast of Edmonton. The facility would use some of the existing infrastructure at the Bruderheim Terminal.

As part of our initial consultation process for the proposed project, nearby landowners will be contacted in accordance with all regulatory and stakeholder engagement requirements. Cenovus’s Stakeholder Management Plan for the proposed DRU facility includes scheduled initial consultation with stakeholders in early October of 2019.

Both the Town of Bruderheim and Lamont County have been consulted and have indicated their support for the proposed project which has the potential to create temporary and permanent employment in the area and contribute to the local and regional economies and tax base.

Cenovus has completed environmental field studies with respect to the proposed DRU project and is including the studies’ findings in its regulatory application. The studies looked at hydrogeology, aquatic, soil and terrain environments, local vegetation, wetlands and rare plants as well as local wildlife. Noise monitoring and air quality modeling are scheduled to continue through the fall of 2019. Additional ground water sampling will be completed in the coming year, and all requirements from the Alberta Energy Regulator (AER) will be adhered to as the project develops.

The DRU would be incorporated into the existing Emergency Response Plan for the Bruderheim Energy Terminal.

Because of its high viscosity or thickness, raw bitumen is safer to transport than diluted bitumen. Once the bitumen has cooled in the rail cars, it will not flow. As such, it is expected to be categorized as a non-regulated product for transportation by rail.

Timeline

If Cenovus decides to build a DRU, we anticipate the following timeline (subject to management approvals):

DRU timeline
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