Imperial Oil looking to build $7 billion facility

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by Richard Gilbert last update:Oct 10, 2014

Imperial Oil Limited is seeking approval from provincial regulators to construct a $7 billion oilsands project near Fort McMurray, Alberta.

“We filed a regulatory application with the Alberta Energy Regulator (AER) for the development of a steam-assisted gravity drainage (SAGD) oilsands project called Aspen, which is on a 52 section lease area owned by Imperial Oil,” said Pius Rolheiser, spokesperson for Imperial Oil.

“The project will be located south of our Kearl site, but unlike Kearl this would be an in-situ project.”

The regulatory application and related environmental assessment for the proposed Aspen development were submitted by Imperial Oil to the Alberta Energy Regulator and Alberta Environment and Sustainable Resource Development on Dec. 17.

The proposed project will be located in the Regional Municipality of Wood Buffalo (RMWB) in northeastern Alberta, about 45 km northeast of Fort McMurray.

It is the first time that the company is proposing to use the SAGD thermal recovery process, which uses horizontal well pairs to recover bitumen located deep below the ground surface.

Two wells will be drilled side by side, about five metres apart, into the reservoir.

The production well is drilled lower than the injection well, so that it sits near the bottom of the reservoir.

Steam is injected into the upper well to heat the bitumen and allow gravity to assist drainage into the lower production well.

The heated bitumen is pumped from the production wells to surface pipelines.

Multiple SAGD horizontal well pairs will be drilled from a single well pad.

As a result, field infrastructure includes the construction of 10 to 15 well pads with seven to 21 well pairs per pad.

The well pads are connected to the central processing facilities through a pipeline network that delivers steam to the wells for injection into the reservoir and transports the steamed bitumen mixture to the central facilities for processing.

The central processing facility will be developed in three phases with initial bitumen production capacity of about 45,000 barrels per day.

It will include six gas turbine generators and two heat-recovery steam generator packages per phase.

After debottlenecking, the maximum combined annual average rate for the central processing facility will be about 162,000 barrels per day.

Aspen has an expected lifespan of about 40 years.

The facility will separate the components of the well effluent, which is a mixture of bitumen, water and gas.

“We are also considering the use of solvents to enhance recovery, which has the potential to reduce water use and greenhouse gas emissions,” said Rolheiser.

“Solvent-assisted SAGD technology is being evaluated in a pilot at Imperial’s Cold Lake operation.”

Diluent is used to help the bitumen flow through the pipeline and different blending options are still being considered.

Blended bitumen from the project is expected to be transported by pipeline to Edmonton or Hardisty via the Woodlands Pipeline or by a third-party pipeline yet to be developed.

The project also involves the construction of cogeneration units to produce electricity. Excess power will be exported.

A main access road, power transmission lines, natural gas, diluent and blended bitumen pipelines will connect the central processing facility to the local infrastructure located within about 10 km.

Operations support buildings will be located adjacent to the central processing facility.

Modules will be fabricated and assembled primarily in the Edmonton area and will be transported by truck to the site.

The Aspen project is expected to have an initial capital expenditure for three phases of $7 billion and future capital expenditure of about $4 billion.

The average construction workforce is expected to be about 450 workers per year for the construction of the central processing facility, initial well pads and facilities for the three phases.

The construction workforce will fly in and fly out from existing airports in the region and will work on a shift schedule.

Workers will live at existing camps near the project and will be transported by bus to and from the site.

Other benefits of the project include estimated royalty revenues to the Government of Alberta of more than $14 billion over the life of the project, as well as estimated annual property taxes to the RMWB of about $40 million.

Pending regulatory and other necessary approvals, it is anticipated that the initial phase of Aspen could begin construction by 2016 and production by 2020.

last update:Oct 10, 2014

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