Imperial approves oilsands expansion

$2 billion project would boost Cold Lake output by 25 per cent

CALGARY— Imperial Oil Ltd. is going ahead with a $2 billion expansion to its Cold Lake oilsands operation in northeastern Alberta, part of a plan to double overall production by the end of the decade.

The project, called Nabiye, will add 40,000 barrels per day of bitumen production after it starts up in late 2014, a 25 per cent boost to Cold Lake’s current output, the Calgarybased oil company said Friday.

“I’d call it a key element in our plan to double our production to about 600,000 oil-equivalent barrels by 2020,” Imperial spokesman Pius Rolheiser said.

Cold Lake is the largest thermal in-situ oilsands project in the world, and Imperial’s biggest producing asset, comprising about half of its daily liquids production.

Cold Lake produced a record average of 160,000 barrels of bitumen per day in 2011, and added $70 million to Imperial’s bottom line during that three-month period, helping drive a 26 per cent jump in quarterly profits.

In order to extract bitumen from 400 metres below the surface, Imperial uses a process called cyclic steam stimulation, in which steam is piped underground through a well-bore and left to soak into the reservoir for a while to soften up the sticky bitumen.

After that, it’s drawn to the surface through the same well-bore.

The Nabiye project has been in the works, off and on, for about a decade.

Imperial filed a regulatory application for a 30,000-barrel-per-day project in 2002, and got approval two years later.

But Imperial decided to hold off on building it at the time, because there was other work to do at its existing Cold Lake operations.

The company had another look at the project in 2008, and decided to make some changes to its original plan, including a cogeneration power plant, a design plan with fewer well pads and a sulphur recovery facility.