Sept/Oct 2007

Kearl gearing up to be a producer

By H. Ednie

Community consultation is an important part of the Kearl project.

The Kearl Oil Sands Project is poised to be one of the next mammoth construction projects to charge down the road to production. In February, the project received conditional approval from the Alberta Energy and Utilities Board, following a joint federal and provincial review.

“This decision is a significant milestone for our project and our company,” said Randy Broiles, senior vice president of resources, Imperial Oil - the designated operator of the project. “Our next steps involve reviewing the decision and the attached conditions, and further advancing engineering work to define the project design, execution strategies, and project cost estimate.”

The potential mine project, owned by Imperial Oil Resources Ventures Limited (70 per cent) and ExxonMobil Canada Properties (30 per cent), could start initial mine production as early as 2010.

Imperial is the only original owner of Syncrude still involved in the Kearl project and, as a result, has a long history of oil sands operation and of contributing to the Fort McMurray community and Wood Buffalo region.

Project details

The open-pit mining operation will have an expected eventual production, based on a phased development plan, of approximately 300,000 barrels per day. The initial mine development will have a design capacity of 100,000 barrels per day, with two more phases planned to be in production by 2020. The total recoverable bitumen before royalties is estimated at 4.6 billion barrels.

True to the oil sands tradition, the initial cost estimate for construction of Kearl is nothing to sneeze at—$5 to $8 billion, in 2005 dollars. Work is ongoing to revise this preliminary cost estimate, and to fully understand the impact of the high industry and construction activity in the province, and specifically, in the region.

The design concept for Kearl is similar to today’s existing oil sands mines in the Fort McMurray region, using state-of-the-art large-scale shovels, trucks, crushers, and a hydrotransport system. There are no current plans for onsite upgrading facilities. Under the staged approach to mine development, the initial step (the first train) will involve clearing and draining the surface area and removing the muskeg overburden and stockpiling it for use in future reclamation.

Conventional tailings treatment technology will be used until tailings can be stored in a depleted mine pit, at which time consolidated tailings technology will be implemented. Other infrastructure development planned for the project includes a water intake and water pipeline, to bring water from the Athabasca River, as well as water storage, an operations camp, and roads.

The Kearl site is located within a 90-minute drive from Fort McMurray, leading to the decision to develop it as a camp-based operation with a workforce on a rotating schedule. Currently, Imperial is working with other oil sands operators in the region on a joint industry airstrip that would be located just south of the Kearl leases.

Like any major project, the Kearl operation will create many jobs. At the construction peak, an estimated 1,700 people will be onsite, and once the operation is in full production with three trains, approximately 1,100 to 1,300 permanent jobs will be created.

Investing in innovation

Positioned as a leading company in the oil sands industry, last winter Imperial announced the creation of the Imperial Oil-Alberta Ingenuity Centre for Oil Sands Innovation research centre at the University of Alberta. Of note, the centre is mandated to find more efficient, economically viable, and environmentally responsible ways to develop Canada’s oil sands resources. Expectations are to invest over $15 million in research over the next five years and recruit more than 50 faculty, graduate students, and researchers.

One focus area of the centre will be the evaluation of the use of non-aqueous solvents to separate and extract bitumen from oil sands, thereby reducing the water usage onsite. Another project will involve the use of nano-structured materials to both reduce energy requirements and improve operating efficiencies in bitumen upgrading.

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