Cenovus to Develop Telephone Lake Oil Sands

Cenovus Energy Inc , Canada's No.2 independent oil producer, said on Friday it has received regulatory approval for its Telephone Lake oil sands project, a facility that could eventually produce more than 300,000 barrels of oil per day.

The company said the Alberta Energy Regulator and the provincial government approved the thermal oil sands project, which will pump steam into oil sands deposits to liquefy the tar-like bitumen so it can flow to the surface.

Cenovus said Telephone Lake will be developed in stages, with a 90,000 bpd initial phase, followed by expansions. However, it will not make a final decision on whether to proceed with construction until next year.

Telephone Lake, located in the northeastern part of Alberta about 90 kilometers (56 miles) from Fort McMurray, will be Cenovus' first wholly owned oil sands project.

It operates the Christina Lake and Foster Creek projects that are half-owned by ConocoPhillips (COP), while the pair's Narrows Lake project is under construction.

Cenovus shares rose 68 Canadian cents to C$28.07 on the Toronto Stock Exchange on Friday. (Reporting by Scott Haggett; Editing by Alan Crosby)