Canadian integrated energy company Husky Energy has started production at its Dee Valley thermal project in Saskatchewan.

The thermal project is noted to be the second of six 10,000bpd thermal bitumen projects to become operational during 2018-2022.

Husky Energy CEO Rob Peabody said: “Dee Valley is the latest in our deep portfolio of repeatable, small-scale Lloyd developments that provide low-cost, reliable feedstock for our Upgrader, asphalt refinery and US refineries.

“These projects have direct access to our refining hub in Lloydminster and can be transported via committed export pipeline capacity to our refineries and other US markets.”

The project is expected to increase by this year-end and will boost the company’s thermal production to 90,000bpd in Saskatchewan.

Peabody added: “In addition, we have many diverse investment options, including the Atlantic region, a large downstream presence in the US and high-netback growth production in Asia. As such, the competitiveness of jurisdiction will remain a key parameter for our investment decisions.”

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The Dee Valley thermal project follows the company’s Rush Lake 2 Lloyd thermal project, which commenced production in October last year and achieved 10,000bbl/d capacity the following month.

The current production at Rush Lake 2 stands at 11,000bbl/d with a steam-oil ratio of 2:1.

In addition, four Saskatchewan thermal projects are being advanced through 2022, having a combined design capacity of 40,000bbl/d.

Drilling for one of these thermal projects at Spruce Lake Central is completed, with production anticipated in the second half of next year.

Foundation work and module fabrication for the project is in progress at Spruce Lake North while site productionis planned for the next year-end.

Lease construction at Spruce Lake East is progressing and production is set for year-end 2021 while the thermal project at Edam Central has received regulatory approval with production expected in 2022.

In January, Husky Energy revealed that it will perform a strategic review of its business and potentially explore a sale of its non-core downstream assets.

Last October, the company made a C$6.4bn ($4.95bn) proposal to acquire all outstanding shares of oil sands producer MEG Energy.