DEFINITION of 'Steam-Assisted Gravity Drainage - SAGD'
Steam-assisted gravity drainage (SAGD) is a drilling technique that is used to extract heavy oil that is too deep or otherwise economically inefficient to mine using traditional methods. The process was originally developed by the Alberta, Canada Department of Energy as an efficient means of recovering oil reserves that are difficult to access.
BREAKING DOWN 'Steam-Assisted Gravity Drainage - SAGD'
SAGD requires a pair of horizontal wells drilled from a central well pad. Steam generators are used to produce steam, which travels through pipelines to the wells. The steam eventually heats the heavy oil to a temperature that reduces its viscosity, allowing it to flow by gravity to a bottom well. The oil is then transferred via pipe from the producing well at the bottom to a plant where it can be treated.