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.