CALGARY, Alberta (Reuters) - Imperial Oil Ltd said on Friday it will go ahead with a C$2 billion ($2 billion) expansion of its Cold Lake oil sands project, adding 40,000 barrels per day of new production to Canada’s largest thermal oil sands development.
Imperial, majority owned by Exxon Mobil Corp, said the Nabiye project will tap a further 280 million of reserves at the northern Alberta project. It will also include a 170-megawatt co-generation plant to produce steam and electricity and a facility to process the tar-like bitumen produced at the site.
Imperial’s Cold Lake project currently produces about 160,000 bpd using thermal methods, where steam is pumped into the ground to liquefy the bitumen deposits so they can be pumped to the surface.
The expansion is one of a number of multibillion-dollar projects aimed at boosting production from Canada’s oil sands, the world’s third-largest crude reserve and the largest single source of U.S. oil imports.
Production from the northern Alberta region is set to nearly double to three million barrels per day by 2020, though environmental groups concerned about rising greenhouse-gas emissions and threats to wildlife and the boreal forest are pushing to slow development.
To counter those concerns, the federal and Alberta governments are set to unveil a new set of environmental monitoring criteria on Friday, replacing a substandard industry-backed regime.
Imperial, Canada’s No. 2 oil producer and refiner, received regulatory approval for the expansion in 2004.
The company’s shares were up 49 Canadian cents at C$47.49 by midmorning on the Toronto Stock Exchange.
Reporting by Scott Haggett; editing by Rob Wilson