February 8, 2012

$2 billion oilsands expansion gets the green light

RICHARD GILBERT

staff writer

Imperial Oil Ltd. has dusted off some old plans and is moving forward with a $2 billion expansion project at its Cold Lake operation in northeastern Alberta.

“While we didn’t make a formal decision to proceed with this project until today, we have been advancing work for several years,” said Imperial spokesperson Puis Rolheiser.

“We have done some preliminary construction, including site clearing and grading for the Nabiye plant site, as well as building an access road to the plant site. This development is taking place in a new part of the lease area in Cold Lake.”

The three phase expansion, called Nabiye, involves development of a new steam generation and bitumen-processing plant, field production pads and associated infrastructure.

The project will increase bitumen production by more than 40,000 barrels per day and is scheduled for completion by the end of 2014.

“We first applied for the Nabiye project in 2001 and received the original regulatory approvals in 2004, but did not set out immediately to build it ” said Rolheiser.

“While we had an approved project, there was other work we wanted to do, which optimized and maximized the existing facilities at Cold Lake.”

Rolheiser said work on Nabiye was reinitiated in 2008 with the start of planning and engineering work.

Imperial proposed three changes to the approved Nabiye project.

The first amendment involves a significant reduction in the surface footprint of the field development plan.

Changes to pad layouts and the use of longer horizontal well technology are expected to significantly reduce the number of pads required to develop the Nabiye resource.

The second amendment is to add a 170-megawatt cogeneration facility that will conserve energy and reduce provincial greenhouse gas emissions.

Cogeneration is a process that uses waste heat from electricity generation to produce the steam used to recover oil.

Some of the electrical power generated by the Nabiye cogeneration will be used at the Nabiye site, with the remainder being used by Imperial’s Cold Lake operations or exported to the provincial grid for sale through the Power Pool of Alberta.

A 144 kV transmission line will connect Nabiye to the Mahihkan North substation for exporting surplus power from Nabiye.

The third proposed amendment is to add sulphur recovery facilities that will further reduce emissions from the plant.

Amended regulatory approvals were obtained in 2010.

Rolheiser said the contracts for the preliminary construction are in place, but other contracts still need to go to tender, including the EPC (Engineering, Procurement and Construction) contract.

Imperial’s Cold Lake facility is the largest and longest-running in situ oilsands operation in Canada.

It includes four steam generation and bitumen production plants.

The operation produced an average of 160,000 barrels of bitumen per day in 2011.

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