December 14, 2011

Construction on $8.9 billion Alberta mine to start next year

RICHARD GILBERT

staff writer

Total E&P Canada Ltd. is starting construction next year on the $8.9 billion Joslyn North Mine project near Fort McMurray, Alberta.

The project, which was originally proposed six years ago, was just approved by the federal government.

“This announcement is good news for jobs for Canadians in the Building Trades - it means good news for construction and maintenance contractors and it means good news for construction apprentices from across this country,” said Robert Blakely, director of Canadian affairs for the Canadian Building Trades.

“Young Canadians work on these projects, learn a trade and make careers in the skilled trades.”

Joe Oliver, Canada’s minister of natural resources, announced on Dec. 8 that the environmental assessment has been completed on the project, which is 65 kilometres northwest of Fort McMurray.

The project received an Order in Council from the Government of Canada, which is the final stage of regulatory approval and marks the beginning of the construction process.

“For nearly six years, Total has worked extremely hard to design and develop the best project possible - economically, socially and environmentally,” said Jean-Michel Gires, president and CEO of Total E&P Canada.

“As operator of the Joslyn North Mine Project, this represents a key component in realizing Total’s plans to be a leading producer in Canada’s oilsands.”

Total has been preparing for early works at the site, which will run throughout 2012.

In parallel, Total is working to complete engineering studies that incorporate changes following its partnership with Suncor Energy on the Joslyn North, Fort Hills, and Voyageur projects.

Suncor and Total E&P Canada Ltd, which is a subsidiary of French-based Total SA, signed an agreement in December 2010, which included a plan to complete construction of the Joslyn North Mine and start production in 2017-2018.

The project consists of an oilsands open pit surface mine and ore preparation and bitumen extraction facilities.

The project also includes: tailings management facilities; on-site energy generation infrastructure to generate electricity and steam; water infrastructure; roads and crossings; on-site infrastructure, including maintenance shops, administration buildings, engineering and operations buildings, and the project camp; material storage facilities; and other supporting infrastructure.

Total SA estimates the Joslyn North Mine Project will create about 16,560 person-years of direct construction employment. The construction workforce is expected to peak at about 4,100 workers.

The mine is expected to produce 100,000 barrels of bitumen per day over its 20 year lifespan with first production now planned for 2018.

The project would increase Alberta’s approved mineable project area by about seven per cent.

Under the joint venture partnership, Suncor owns 36.75 per cent of the project and Total holds 38.25 per cent, as the operator.

Occidental Petroleum holds 15 per cent and Inpex Canada Ltd. holds 10 per cent.

Oliver said the project, which was originally proposed six years ago, is an example of the need for a more efficient and effective regulatory system.

“It is crystal clear that we need to put an end to unreasonable delays — delays that can jeopardize the viability of projects like Joslyn and harm our reputation as an attractive place to do business,” said the minister.

“In particular, definitive timelines from the beginning to the end of the regulatory process are needed to improve the timeliness and predictability of the regulatory environment, and support investment and planning decisions.”

A joint federal and provincial review panel granted a conditional approval to Total for the project in January 2011.

However, public hearings were temporarily adjourned in September, 2010, when the Mikisew Cree First Nation raised questions about constitutional law and the mismanagement of oilsands lands in their traditional territory, by the provincial and federal governments.

Under Treaty 8, the federal government promised the Mikisew that they would have the continued right to fish, hunt, trap and carry out traditional activities in their territory in perpetuity.

The Mikisew withdrew their constitutional objection and challenge to the hearing, after Total offered to pay the band an undisclosed sum and agreed to a private “social contract”.

Environmental groups said Total failed to assess the cumulative impacts of the project, which will produce large amounts of acid rain and toxic tailings waste.

They said there is no proven plan to keep the toxins from entering the region’s lands and water.

The joint review panel concluded the project would have no significant adverse effect on species at risk, wildlife and water quality, if Total met certain conditions and recommendations.

The decision places 20 conditions on Total related to environmental and technical aspects of the project, including tailings and reclamation management.

The Suncor-Total joint-venture is also implementing plans to develop the Voyageur upgrader and the Fort Hills mine in parallel, so that both come on stream in 2016. The bitumen from the Joselyn mine will be processed at the Voyageur upgrader.

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