Imperial eyes new $2-billion oilsands plant
New green technology based on SAGD
CALGARY• Imperial Oil Ltd. has revealed plans for a new $2 billion oilsands plant at a time its competitors have cancelled or deferred new projects to survive the oil price collapse.
Imperial, one of the largest oil and gas companies in Canada, announced Friday it had filed an application with the Alberta Energy Regulator to build a 50,000 barrel per day oilsands facil- ity, which would extract oil using a new technique the company says would reduce greenhouse gas emissions by 25 per cent compared with existing projects.
If built, the new project – which Imperial had formerly dubbed Midzaghe, the Dene word for owl – will use an adaptation of steamassisted gravity drainage (SAGD) technology that uses less water and less energy to produce oil.
Imperial spokesperson Lisa Schmidt said the company has been piloting this “solvent- assisted” SAGD in the field, and recently amended its application for another thermal oilsands project to use this solvent-based technology.
Solvents – like butane and propane – reduce the need for pressure and reduce the need for high- temperatures i n SAGD extraction, allowing more oil and gas to flow to the surface while using less energy.
Schmidt said that in Oct ober Imperial updated its Aspen oilsands project application, first filed in December 2013, to reflect that the company intended to use its solvent- assisted SAGD process in the first 45,000- bpd phase of that project.
Other major oilsands companies, including Suncor Energy Inc. and Cenovus Energy Corp., have been piloting solvent- based extraction techniques for years in an effort to reduce both emissions and costs.
Oil and gas companies in Alberta are under increasing pressure to reduce their emissions as the province prepares to implement new climate change policies, which will charge companies a $ 30 per tonne carbon tax beginning in 2017.
First Energy Capital Corp. analyst Michael Dunn said in a research note that Imperial has been using solvents for several years to improve production in some of its older wells on its Cold Lake oilsands leases, which is where the new project would be located.
Dunn said Imperial is “the most experienced user of solvents in the bitumen recovery process.”
To date, no major oilsands player has moved from a pilot project to a full- scale commercial facility using solvents.
If built, the Aspen oilsands project could be the first to use this technique on a commercial scale, followed closely thereafter by the new Imperial project.
Imperial, whose majority owner is Exxon Mobil Corp., announced that if it receives regulatory approvals in time, it could sanction the project in 2019 and the facility could be producing oil by 2022. Schmidt confirmed the project’s current estimated cost is $2 billion.
Earlier this week, Imperial announced it had sold its remaining 497 Esso stations for $2.8 billion, leading many analysts to speculate that the company had a sizable “war chest” that could be used to buy up struggling oilsands producers.