Fort McMurray Today
The long-awaited Kearl project is a go after Imperial Oil’s board of directors gave its approval this morning for the first phase of the mining project 70 kilometres north of Fort McMurray.
“As we’ve said in the past, the Kearl lease is a very high-quality resource. The project itself was viewed as a very promising project and so, given our long-term focus on the business, the decision was made to approve the project and proceed with it,” said Imperial spokesman Gordon Wong, in Toronto this morning for the company’s investor conference. Imperial Oil, one of the country’s largest producers of crude oil and natural gas, is the nation’s largest petroleum refiner.
The Kearl project is to be developed in three phases, ultimately producing more than 300,000 barrels a day of bitumen. The first phase of the project, expected to begin production in late 2012 with total production to average 110,000 barrels per day, is anticipated to cost about $8 billion or about $4.50 per barrel to construct. Kearl’s mining operations will only use some of the total project lands at any given time and many areas will not be affected for 20 to 25 years.
Kearl’s total recoverable bitumen is estimated to be 4.6 billion barrels over the projects anticipated 50-year lifespan. The company has stated all disturbed lands will be progressively reclaimed and returned to productive use.
“Work has been underway at the site for a little while now in terms of site preparation,” added Wong.
By the end of this year’s first quarter, Imperial had spent about $800 million on the project to date, and had nearly 1,000 contractors and employees engaged in the field and in engineering offices to progress this high quality project. Also, Imperial has selected AMEC, an international engineering and project management firm, to oversee the Kearl facility. The engineering, procurement and construction management contract is for phase one.
Major construction would be the next stage though Wong didn’t have a specific timeline but doesn’t anticipate it being much longer given the 2012 production start.
“This is a very exciting project,” he said. “We’re very excited about this significant project and what it means not only for our company but in terms of developing a significant resource for Albertans and Canadians.”
According to Imperial’s website, Kearl Lake was originally known as Muskeg Lake by the aboriginal people in the region, who hunted and trapped in this area. It was renamed in 1950 in honour of Flight Lieutenant Eldon Kearl, a Second World War Royal Canadian Air Force bomber pilot born in Cardston, Alta. He was killed in action at age 23 when his plane went down during nighttime bombing raid over Berlin on Jan. 27, 1944.