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Imperial Launches Largest Canadian Oilsands Project in Five Years

Canada’s top industrial natural gas user, Alberta thermal oilsands production, embarked on fresh growth Thursday with an investment decision to build the biggest project in five years.

Imperial Oil Ltd., 70% owned by ExxonMobil Corp., announced it plans to spend C$2.6 billion ($2 billion) in construction on the first of two 75,000 b/d stages in an underground extraction development called Aspen.

The project is to pioneer large-scale use of technology devised to reduce the rate of growth in oilsands gas demand with a chemical variation on a widely used production method, steam-assisted gravity drainage (SAGD).

Aspen is forecast to cut industry average SAGD gas consumption, water use and carbon emissions by as much as 25% by partially replacing steam with solvent injections into deeply buried oil sands deposits.

“This is the right technology at the right time to make a competitive investment,” Imperial Chairman Rich Kruger said. “We have made the decision to proceed now because we believe this advanced technology will further the evolution of Imperial’s oilsands business.”

Aspen stands out as the biggest new oilsands project approved by the Alberta Energy Regulator since 2013, when Suncor Energy, Teck Resources and Total SA started building their recently completed 194,000 b/d Fort Hills mine for C$17 billion ($13.6 billion).

Imperial said its schedule for proceeding with the second 75,000 b/d stage of Aspen would depend on several factors, “including foundational project performance and overall business and market conditions.”

On top of cutting oilsands greenhouse gas emissions, Imperial reported making cooperation, industrial benefits and environmental stewardship agreements with seven native groups near the Aspen location 45 kilometers (27 miles) north of Fort McMurray.

The National Energy Board’s current Canadian industry outlook forecasts 60% growth in oilsands production to 4.5 million b/d by 2040, even if commodity prices remain well below pre-2014 levels of US$100/bbl or more.

The Aspen project is timed to begin producing in 2022, after scheduled completions of 1.8 million b/d in new Enbridge Inc., TransCanada Corp. and Trans Mountain Pipeline export service that is currently running regulatory gauntlets in Canada and the United States.

 

 

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