Suncor Energy Inc., Canada's largest oil and gas producer, said on May 8 it plans to submit an application to regulators for a new thermal oil sands project later in 2017, which could eventually produce up 160,000 barrels per day (Mbbl/d).

The Lewis project, located about 25 km (15.5 miles) northeast of Fort McMurray in northern Alberta, will be developed in stages and produce for an estimated 25-40 years.

Suncor said it has not yet formally sanctioned the project, but if it goes ahead, construction could begin in 2024, with first steam being pumped into the reservoir to liquefy and extract tarry bitumen in 2027.

The Calgary, Alberta-based company also said it is exploring new technologies to develop the Lewis resource, such as using solvents or electromagnetic heating instead of steam for bitumen extraction.

Chris Cox, an analyst with Raymond James in Calgary, said Lewis fits in with Suncor's strategy of modular growth in the oil sands, and would be very similar to its recently approved 80 Mbbl/d Meadow Creek East project.

"Long-term growth is predicated on almost doing a manufacturing process in [thermal] projects with standardized plant designs," Cox said.

Canada's oil sands are home to the world's third-largest crude reserves but also carry some of the world's highest operating costs due to their remote location and energy-intensive production methods.

The region was hard-hit by the global oil price crash that started in mid-2014, with several producers deferring or canceling about 20 oil sands projects.

Since then however, companies have reduced costs by about 30%, making some plants viable even with oil prices hovering around $50/bbl.

Meadow Creek East, also in northern Alberta, received regulatory approval in March. Other companies, such as Cenovus Energy and Canadian Natural Resources Ltd., have restarted deferred projects in recent months.

Company spokeswoman Erin Rees said Suncor anticipates applying for regulatory approval on its 40 Mbbl/d Meadow Creek West thermal project later this year.