Imperial Oil says it’s proceeding with the development of its $2.6-billion Aspen oil sands project, about 45 kilometres northeast of Fort McMurray.
The company said the project, which is expected to produce about 75,000 barrels of bitumen per day, will include the first major commercial application of next-generation oil sands recovery technology. The technology is designed to lower greenhouse gas emissions intensity and water use, while improving development economics.
“Through the application of advanced solvent-assisted, steam-assisted gravity drainage technology at Aspen, Imperial is building on its recently announced commitment to reduce the greenhouse gas emission intensity of its operated oil sands facilities. The new technology is estimated to reduce greenhouse gas emissions intensity and water use intensity by up to 25 per cent, compared with traditional steam-assisted technology. Imperial anticipates that Aspen’s emissions intensity will be one of the lowest among in situ oil sands operations across the industry,” it said.
The Aspen project is expected to create about 700 jobs during peak construction and more than 200 jobs during operations, added the company. More than $4 billion in direct federal and provincial tax revenues are expected to be generated over the 30-year life of the project, and it will deliver more than $10 billion in royalty revenues to the Alberta government.
Imperial said construction will begin in the fourth quarter of 2018 with first production expected in 2022. There is potential for further development of up to another 75,000 barrels per day of bitumen production with timing dependent on a number of factors, including foundational project performance and overall business and market conditions, it said.
“We do not take investment decisions lightly, particularly in these challenging times,” said Rich Kruger, Imperial chairman, president and chief executive officer, in a statement. “This is the right technology at the right time to make a competitive investment. We have made the decision to proceed now because we believe this advanced technology will further the evolution of Imperial’s oil sands business.”
Imperial said it consulted with seven local Indigenous communities during the regulatory application process.
Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald, including 12 years as a senior business writer.