Abstract: The economics of a steam injection project is detemined by its capitalinvestment and operating cost which in turn depends considerably upon the capacity of steam injection system to generate and handle a large volume of high-temperature and high-pressure fluid This paper gives an attempt to apply the principle of queueing theory, integrated with a M/M/C model of stochastic service system, Linear programming technique, and the technique of marginal analysis to optimize the steam injection system, including optimum size and a combination of steam generating stations, optimum number of steam generators in each station, economie ranges and optimum number of wells controlled by each station. The effect of heavy oil prices on the results of project appraisal is also discussed. A discussion on the Shanjiasi thermal recovery project in Shengli Oilfield is presented as an example.