CDN NEWS | 
US NEWS 
Blackrod SAGD goes full-scale after 15 years of pilot testing
Follow CEC on LinkedIn CEC LinkedIn
Follow CEC on Facebook CEC Facebook
Follow CEC on Twitter CEC Twitter
The Blackrod SAGD project. Photo courtesy International Petroleum Corporation
For the first time in nearly eight years, a brand-new oil sands project is operating in Alberta.
It’s a rare development even as oil sands production continues to set new records.
That’s because Blackrod, located about 3.5 hours north of Edmonton, isn’t an expansion or optimization of an existing project.
It’s a new facility built on a site that previously had no large-scale oil sands operations.
Drilling for the Blackrod SAGD project. Photo courtesy International Petroleum Corporation
The 30,000-barrel-per-day steam-assisted gravity drainage (SAGD) project will be “transformational” for Vancouver-based International Petroleum Corporation (IPC), said CEO William Lundin.
At full rates, Blackrod will nearly double the company’s current production of about 45,000 barrels per day. And it’s got room to grow.
“We very much believe in future phase expansions,” Lundin told analysts last year.
“Blackrod [is] a massive resource base where we have greater than one billion barrels of contingent resources.”
The same could be said of the broader oil sands, a 1.8-trillion-barrel resource base where most growth over the past decade has come from optimizing existing projects, according to S&P Global.
Nearly all future growth will come from optimizations too, analysts said in S&P Global’s latest oil sands outlook.
These “learning-by-doing” investments to expand the vast existing asset base are expected to increase oil sands production by about 400,000 barrels per day by 2030.
While it’s uniquely new, Blackrod is also based on learning by doing.
At the site is one of the oil sands industry’s longest-running SAGD pilot projects, a single well pair operation that has been running since 2011.
Blackrod SAGD pilot operations. Photo courtesy International Petroleum Corporation
Production averaged about 630 barrels per day in 2025, according to the Alberta Energy Regulator.
In 2023, IPC gave the go-ahead to build the first phase of full operations at Blackrod, an investment of approximately $1.17 billion.
The project has regulatory approval to produce up to 80,000 barrels per day.
Steam injection is now underway, marking the start of the underground warm-up phase, with first oil expected by the end of September.
The unaltered reproduction of this content is free of charge with attribution to the Canadian Energy Centre.
Share This:
COMMENTARY: Big Oil Won’t Keep Beating the Crude Market