Husky Energy Inc. has sanctioned two more SAGD projects in Saskatchewan, which will bring its total thermal oil output in the Lloydminster region to about 55,000 bbls a day in 2016.

The Edam East and Vawn projects are each designed to produce 10,000 bbls a day. Work is underway on Edam East and Vawn is scheduled to start this year. Husky said the two new SAGD plants will be nearly identical to the Pikes Peak South and Rush Lake projects.

Current output from Husky’s Saskatchewan thermal projects is about 36,700 bbls a day. The company said that includes 4,200 bbls a day from Pikes Peak, 16,000 bbls a day from Bolney/Celtic, 1,500 bbls a day from the Rush Lake pilot, 5,000 bbls a day from Paradise Hill and 10,000 bbls a day from Pikes Peak South.

“Three years ago, with heavy oil production fighting to remain flat, we implemented a strategy to transform and rejuvenate the business. We are seeing the results of that today,” CEO Asim Ghosh said in a press release. “Steady performance from our existing thermal facilities and these two new plants, along with projects currently under construction at Sandall and Rush Lake, will add another 33,500 bbls a day of new production over the next three years, more than offsetting declines in non-thermal production.”

Husky’s growing focus on thermal projects is guided by a portfolio of opportunities and a proven template of smaller SAGD plants providing better access to heavy oil reservoirs. The company said its operating costs at the existing SAGD plants were under $10 a bbl in 2013.

In December 2012, Husky set a target of achieving 55,000 bbls a day of production from thermal projects by 2017. With the continued success of its thermal projects that timeline is being accelerated to 2016.

Steaming is currently underway at the 3,500 bbl-a-day Sandall thermal project with first production expected this quarter, and construction is advancing at the 10,000 bbl-a-day Rush Lake project with first oil expected in the second half of 2015.