Syncrude Canada Ltd. is laying out plans to boost synthetic crude oil production to 425,000 barrels a day by 2020, the largest partner in the enormous oil sands project said Wednesday.

The Mildred Lake upgrader can handle more of the tar-like bitumen from Syncrude’s vast mining operations than the 350,000 barrels per day it is currently able to churn out, Canadian Oil Sands Trust COS.UN-T

said in a statement.

In order to unlock the added capacity, some work needs to be done on that plant and other facilities. It’s not clear yet how much the revamps would cost, and all of the Syncrude partners as well as government regulators would need to approve the plans.

“Under today’s economic conditions, we believe these expansion plans have the advantage of bringing on production growth with less project execution risk and better economics than constructing greenfield upgrading facilities,” said Canadian Oil Sands Trust chief executive Marcel Coutu.

The expanded upgrader would handle bitumen from Syncrude’s yet-to-be-developed Aurora South mine. Construction on a first mining train is set to begin in 2012, with production expected by the end of 2016.

A second mining train will bring total bitumen production at Syncrude to 600,000 barrels per day by the end of the decade.

“I believe that, given the size of Syncrude’s resource base, we still have the ability to grow beyond this expanded 600,000 barrel per day productive capacity level,” said Mr. Coutu.

The expansions will leave Syncrude with more bitumen than it is able to upgrade into synthetic crude, so the plan is to sell the extra raw product on the open market.

UBS Investment Research analyst Andrew Potter said the news is positive, but many unknowns remain.

“Syncrude’s long-term strategy is better defined and more credible following today’s announcement,” Mr. Potter wrote in a note to clients.

“However, the key questions on costs and whether or not all owners (Syncrude requires unanimous approval) will back the project will remain unanswered for some time. We do not expect investors to place significant value into (Canadian Oil Sands Trust) for these expansions until these questions are answered.”

Canadian Oil Sands Trust has a 37 per cent stake in Syncrude, making it the biggest player in the consortium. Imperial Oil Ltd. IMO-T

, majority owned by ExxonMobil Corp. XOM-N

, is the second-largest partner with 25 per cent.

Suncor Energy Inc. SU-T

inherited a 12 per cent stake in Syncrude through its merger with Petro-Canada last year.

ConocoPhillips COP-N

owns 9 per cent, but has plans to sell its stake as part of a major divestiture program. Canadian Oil Sands Trust and Imperial have both been cited as potential buyers.

Nexen Inc. NXY-T

holds 7 per cent of Syncrude and Mocal Energy Ltd. and Murphy Oil Co. each own 5.

The Syncrude project, north of Fort McMurray, Alta., is the largest of its kind in the world.