Imperial commissioning Kearl oil sands mine

Imperial Oil has begun commissioning its initial Kearl oil sands mining development in the northern Athabasca region of Alberta and expects production of diluted bitumen from the first froth-treatment train to begin this quarter (OGJ Online, Jan. 19, 2012). Production will ramp up to 110,000 b/d of bitumen over several months.

Cost of the initial development is expected to be $12.9 billion (Can.).

An $8.9-billion expansion project sanctioned in 2011 will boost production by a further 110,000 b/d.

Imperial said the combined projects will develop 3.2 billion bbl of bitumen at a cost of about $6.80/bbl, an increase from $6.20/bbl estimated earlier.

The higher cost reflects resequencing of work related to module transportation and an early onset of winter and harsh weather during start-up. Imperial said permitting and regulatory issues related to module transportation in the US required nearly 2 years to settle.