During thermal enhanced oil recovery processes such as Cyclic Steam Stimulation (CSS) and Steam Assisted Gravity Drainage (SAGD), heat is transferred from the wellbore and reservoir to the surrounding formation. The thermally induced deformation in shale can pose an impact on casing and caprock integrity. In this research, thermally induced deformation in argillaceous shale was studied by applying an anisotropic thermal-strain model. Shale's intrinsic fabric anisotropy is considered in this new model. Thermally induced strain in shale is contributed by the strain of the solid particle and the strain in clay mineral's microspace such as Stern layer (bound water) and Diffusion Double Layer (DDL). The proposed anisotropic thermal-strain model was used to study on thermally induced deformation behaviors of argillaceous shale in Western Canada Sedimentary Basin (WCSB). The modeled volumetric strain indicates that shale could contract or dilate depending on the clay content and temperature. The resultant behavior represents the combined effect from the thermal expansion of the solid particle and the bound water as well as thermal contraction of the DDL in clay mineral. Due to the oriented fabric in shale, the thermal-strains along the vertical and the horizontal directions are different. Thermally induced contraction could cause loss in confinement provided by the formation and lead to fracturing. Numerical simulations were conducted to investigate temperature distributions around a thermal well for CSS and the reservoir-caprock interface for a SAGD project. The possibility of thermally induced contraction in shale and its impact on borehole and caprock integrity were evaluated.