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Imperial Oil awards $300 million Kearl Expansion to CB&I

ExxonMobil to boost oil sand production in Canada

Through Imperial Oil Ltd (Imperial Oil), ExxonMobil is planning to double upstream production capacity in Canada in the period 2010 – 2020 supported by $30 to $40 billion capital expenditure.

Imperial Oil is an ExxonMobil company based in Calgary and operating  oil and gas production, refining and petrochemical facilities in Canada for 130 years.

The main oil sand crude production comes from Cold Lake and Syncrude where Imperial Oil holds 25% and the most important development are concentrated on:

 – Kearl and Athabasca projects in Alberta

 – Horn River Basin in northeastern BC

The Kearl oil sand project is located 70 km north of Fort McMurray with working interest shared between Imperial Oil, the operator, and ExxonMobil Canada.

With 4.6 billion barrels of recoverable reserves, Kearl is one of Canada’s largest and highest quality oil sands deposits.

The  project will offset declines in conventional oil production and will help meet North America’s energy demands for years to come.

Kearl will be one of Canada’s largest open-pit mining operations with regulatory approval for up to 345,000 b/d of oil production over 40 years.

The development of the field is planned in different phases with an initial step around 110,000 b/d of oil production and does not include any upgrading facility on site.

The oil sand will be treated in existing Imperial Oil and ExxonMobil refineries in North America.

The construction of Kearl phase 1 is well in progress and ready to start operations in 2012.  

The plan for Kearl Expansion has been redesigned to improve efficiency, minimize facility requirements and to reduce the plant footprint.

Thus the Kearl Expansion will take advantage of the capital expenditure in initial infrastructure and will utilize modular design one to replicate facilities.

CB&I wins Kearl Oil Sands Expansion Project Contract

Kearl development includes two large packages:

 – Oil sand mining process up to the bitumen production

 – Infrastructures for water collection and treatment

The mining process consists of using high-capacity shovels and heavy-haul trucks to remove ore and transport it to an on-site facility where the ore will be crushed and mixed with water for slurrying.

From here, the slurry will be transported by pipeline to a bitumen extraction facility where bitumen will be separated as froth (a mixture of bitumen, water and fine solids) and the froth will be further treated to produce bitumen suitable for blending.

Kearl will use Imperial Oil’s proprietary paraffinic froth treatment technology (PFT) to process bitumen on-site to where it can be blended with natural gas condensate to create a dilbit (diluted bitumen) product.

This dilbit is also used for transportation direct to market via pipeline from the mine site.

By this process Imperial Oil and ExxonMobil eliminate the cost and environmental footprint of an on-site upgrader.

Since Kearl will be connected to a substantial North American pipeline system, dilbit can be transported straight to refineries that are already configured to process heavy crude oil and bitumen.

Regarding the water process, Kearl will also require development of related infrastructure, such as a:

 – River water intake

 – Water pipeline to allow water volumes to be withdrawn from the Athabasca River

 – Water storage on-site

 – Water recycling from froth

Recycled water will be the main water source for the operations once the system is filled and a steady state is reached.

Fresh river water will then be used as a supplementary source.

Kearl initial development engineering, procurement and construction (EPC) contract had already been awarded to CB&I for $900 million and is now well in progress.

In July 2012, Imperial Oil and ExxonMobil awarded a $300 million contract CB&I for work on the Kearl Expansion project.

CB&I’s project scope for this phase of the work includes:

 – Procurement

 – Module assembly at CB&I’s Fort Saskatchewan facilities

 – Construction and installation of modular components at the site.

CB&I is providing engineering, procurement and construction (EPC) services to Imperial Oil and ExxonMobil on the Kearl project since 2008, this contract for the Kearl Expansion will contribute to help them to double their production in Canada by 2020.

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