Kearl. Project Description Update Kearl Mine Development

Transcription

1 Project Description Update Mine Development May 2006

2 This document contains forward-looking information on future production, project start-ups and future capital spending. Actual results could differ materially due to changes in project schedules, operating performance, demand for oil and gas, commercial negotiations or other technical and economic factors. WB

3 PROPOSED DEVELOPMENT The Oil Sands Project is a potential oil-sands mining, pipeline and upgrading project in Alberta, proposed by Imperial Oil Resources Ventures Limited (Imperial Oil) and ExxonMobil Canada Properties (ExxonMobil Canada). Imperial Oil Resources, as designated operator, submitted the mine application (leases included in application are shown in figure) and related environmental impact assessment to the Alberta Energy and Utilities Board and Alberta Environment in July The company responded to the regulators' information requests in March 2006 and expects to hold public hearings in the second half of Fort McKay CNRL Deer Creek Syncrude Petro- Canada Athabasca River Syncrude Suncor Shell Syncrude Shell Suncor Fort McMurray WHO ARE WE? Imperial Oil Limited Imperial Oil Limited is Canada's largest integrated (production, refining and product delivery) petroleum company. It's a leading producer of crude oil and natural gas and a major company by international standards. The company's focus is on Syncrude Imperial Oil 88A 36 31A 6 87 ExxonMobil exploring for and producing oil and natural gas, refining and marketing petroleum products, and manufacturing and selling petrochemicals. It has about 5,100 employees in two operating divisions - the Resources Division and the Products and Chemicals Division. Resources Division Imperial's Resources Division manages the company's natural resource operations and is based in Calgary, Alberta. It is one of Canada's largest producers of crude oil and natural gas. It is a leading developer of Canada's vast oil sands resources through its 25 percent ownership of the Syncrude project and its operations at Cold, Alberta. Imperial is the only original owner of Syncrude still involved in the project and, as a result, has a long history of contributing to the Fort McMurray community and Wood Buffalo Region. Imperial is also the leader of a Canadian group advancing the development of natural-gas resources in the Mackenzie Delta region of Canada's Far North. The company also operates 18 pipelines and has ownership interests in several others. Products and Chemicals Division The Products and Chemicals Division manages the company's petroleum products and chemicals businesses, under the Esso and Mobil brands. The products group operates four refineries, and an extensive network of retail and wholesale outlets. It is one of the largest suppliers of refined products in Canada. Of the company's four refineries, three have some capability to process bitumen and are pipeline-connected to the proposed development region. The chemicals group operates four manufacturing plants and a number of strategically located distribution centres across the country. It's one of the largest chemical companies in Canada. Chemical products include primary petrochemicals, plastic resins, solvents and additives for lubricating oils. 2

4 ExxonMobil Canada ExxonMobil Canada (formerly Mobil Oil Canada) is a wholly owned subsidiary of Exxon Mobil Corporation and a major petroleum producer in Canada. The company holds a leadership position in key petroleum exploration and production areas, with large working interests in the Hibernia, Terra Nova and Sable offshore energy projects off Canada's East Coast. The company has about 1,100 employees who support its operations across Canada. In western Canada, ExxonMobil operates nine oil and gas facilities and has ownership interests in 13 other facilities. It's also part of the Imperial-led, Canadian group advancing the development of Mackenzie Delta natural-gas resources in Canada's Far North. ExxonMobil's western Canadian holdings include interests in more than three million acres of exploration lands. This includes portions of s 36, 31A and 88 in the Athabasca region. PROJECT DETAILS Estimated Production The proposed development will be an open-pit mining operation. Expected eventual production, based on a phased development scenario, could average about 300,000 barrels of bitumen a day, with variations above and below this volume. This will likely involve an initial mine development as early as 2010 with design capacity of about 100,000 barrels-a-day, with two additional phases in 2012 and Maximum production could be up to 345,000 barrels-a-day. Estimated Resources Based on evaluation drilling carried out to date, total recoverable bitumen before royalties is estimated to be 4.6 billion barrels using current government guidelines. Estimated Cost The initial cost estimate for the mine development was estimated to fall in the $5-8 billion range in 2005 dollars. Work is being done to refine this preliminary cost estimate and fully understand the impact of high industry activity on this estimate. Estimated Schedule Following is a preliminary schedule for the project Task Environmental Baseline Studies Public Consultation and Info. Sharing Release Project Update and Draft EIA Terms EIA Terms of Reference Finalized Environmental Impact Assessment Prepare/File Regulatory Application Regulatory Process/Approvals Engineering, Procurement and Construction First Oil Construction of Second Train Second Train Start-up Third Train (2018) 3

5 Preliminary Development Concept Shovel Trucks Crusher Conveyor Slurry Plant Oil Sands Slurry Water Mining Froth Treatment Diluent Extraction Hydrotransport/ Conditioning Froth Sand/Water To Market Recycle Water PROPOSED FACILITIES AND OPERATION Oil-Sands Mine The mine's design concept is similar to existing oil-sands mines in the Fort McMurray region. Plans are to use state-of-the-art, large scale shovels, trucks, crushers and an oil-sands hydrotransport system. The base mine will be developed in a staged approach. The initial mine development (the first train) will involve clearing and draining the surface area, removing the muskeg overburden before mining the oil sands can begin, and stockpiling the muskeg for use in future reclamation. The current planning basis includes an initial mine train with production capacity of about 100,000 barrels-a-day. A second train will follow. These developments would take place on s 6 and 87. Bitumen Extraction The mined ore will be crushed, mixed with water for slurrying, transported and conditioned in a pipeline, and fed to a bitumen-extraction facility. The bitumen will be separated as froth a mixture of bitumen, water and solids. The froth will be further treated in a froth treatment plant to produce bitumen for sale. Tailings Bitumen Upgrading Current plans do not include any on-site upgrading facilities for the first phase of development. To reduce the bitumen's viscocity such that it can be shipped by pipeline, a number of blending options are being considered. The product will be transported to market through a pipeline system. Imperial and ExxonMobil own extensive refinery infrastructure in Canada and the U.S. that could receive bitumen or upgraded feedstock to make a variety of refined products. Production may also be sold to third parties. Any future upgrading capacity or related pipelines to support future mine phases would be the subject of a separate application. Mining Sequence 4

6 Tailings Management Tailings (a mixture of fine clay, sand and water) are a by-product of the bitumen-extraction process. The application includes an external tailings area in the northeast portion of 6. Conventional tailings-treatment technology is planned for use until tailings can be stored in a depleted mine pit, at which time consolidated tailings technology will be implemented. This will allow Imperial to minimize surface disturbance, reduce the ultimate fine tailings volume and accelerate the reclamation of the external tailings area. R11 Bitumount Fort McKay Fort McKay I.R. Ath abasca River R10 R9 R8 R7 R6 W4 River Water Intake Winter Road Muskeg River McClellend Canterra Road Kinder Morgan Corridor Pipeline Raw Water Pipeline Powerline FirebagRiver N Potential External Water Tailings Area Storage Plant Site Administration Maintenance and Operations Shop Camp North Pit East Pit Powerline South West Pit Pit Project Roads Compensation Industry Hot Airstrip Bitumen Natural Product Gas Pipeline Pipeline Steepbank Gas Pipeline T99 T98 T97 T96 T95 T94 Infrastructure The project includes development of related infrastructure, including a water intake and water pipeline (to allow water to be withdrawn from the Athabasca River), water storage, an operations camp, and roads. Given the project's remote location and estimated commuting time of at least 90 minutes each way, Imperial is planning to have a camp-based operation with a workforce on a rotating schedule. This will allow Imperial Oil to have a safe, healthy, productive and efficient work environment with minimal impact on the Fort McMurray infrastructure. Imperial is planning to fly operators to the site, likely from Edmonton. For this reason Imperial is currently working with other operators on a joint industry airstrip just south of the leases. Fresh Water Source The current design basis for the project has the Athabasca River as the water source for this development and includes 30 days of on-site contingency water storage which would allow Imperial to reduce withdrawals during low-flow periods that occur in the winter. Streams, small water bodies and the upper reaches of the Muskeg River will be diverted from time to time during the mine operations. These diversions will affect fish and fish habitat in the area. The lost fish habitat will be more than offset with created fish habitat by extending the northern part of. The extension will have a water depth greater than providing better over-wintering habitat and improving the fish resource in the lake. Energy Efficiency Energy efficiency is a key component of Imperial's design basis and, as such, our application includes the low energy extraction process and electrical cogeneration. Advanced energy management processes will also be applied to continuously improve the energy efficiency of the operation. 5

7 ENVIRONMENTAL MANAGEMENT Company Commitment Imperial and ExxonMobil are committed to environmental management as an integral part of their business. This includes integrating environmental considerations in business planning, facilities and product design, operating processes and training programs. The companies' current operations incorporate extensive environmental design and protection measures to mitigate effects on water, land and air quality. In addition, a variety of ongoing consultation forums provide the public with opportunities to review and provide input to the companies' environmental performance and future developments. Reclamation Mining operations will change the landscape and traditional land use will be affected. The mining operations only use a portion of the project lands at any time and much of the lands will not be affected for years. When project lands are used later in the life of the project, the lands used earlier will be reclaimed. The intent is to engage stakeholders in reclamation planning so that, to the extent practical, lands reclaimed will have traditional land use capability and available access. Progressive reclamation will continue throughout the life of the project. The graphics show the planned status of the site at four different time periods throughout the operational life of the mine. R8 R7 R6 W4 Muskeg River 88B Muskeg River 88B Muskeg River 88A Compensation R A R Wapasu Creek 36 88A Compensation 31A R8 Closure Wapasu Creek 36 88A R Kilometres R6 W4 Potential Water Storage IOR Map No.: R Kilometres IOR Map No.: R7 R6 W4 T97 Potential Water Storage R6 W4 T96 T95 T97 T96 T95 T97 Muskeg River A 6 Potential Water Storage T97 88B Wapasu Creek Compensation T96 88B Wapasu Creek Compensation T96 31A Kilometres T95 IOR Map No.: A Kilometres IOR Map No.: T95 Legend Reclaimed Areas Water Management Areas Surface Water Diversions Active or Non-Reclaimed Mine Areas s 6

8 SOCIOECONOMIC BENEFITS Imperial will continue to utilize and build upon socio-economic information gathered from other operators and industry associations, such as the Athabasca Regional Issues Working Group (RIWG), along with input from our own public consultation process to assess the socio-economic impacts and benefits of this project. We expect benefits to include: Investment of an estimated $5 to 8 billion (2005 $CDN) to develop the Oil Sands Project, which will be largely spent in the province of Alberta and across Canada. The peak construction work-force is expected to be 1,700 people. The Project is committed to supporting local and regional business development by preferring to use, on a competitive basis, qualified local and regional materials and services suppliers with high safety and environmental performance standards. We intend to use the Regional Economic Development Link (RED Link) to facilitate communication with the local business community for local contracting opportunities. Approximately 1,100 to1,300 permanent jobs, when all three mine trains are in operation. Imperial will adopt a camp-based operation with a workforce on a rotating schedule. Provincial and federal revenues from corporate taxes and royalties are expected to be $24 billion (2005 $CDN) over the life of the project. A preliminary estimate of property taxes to the Regional Municipality of Wood Buffalo is $14.5 million per year during peak operations. Personal income taxes and induced revenue benefits will provide additional benefits to the provincial and federal government. 7

9 WE VE MOVED All proposed development activities have now been moved to Imperial's offices in downtown Calgary, Alberta. The company address is: Imperial Oil Resources 237 Fourth Avenue S.W. P.O. Box 2480, Station M Calgary, Alberta, Canada T2P 3M9 Inquiries related to the proposed project are welcome, and should be directed to: Mark Little Oil-Sands Development Manager Tel mark.s.little@esso.ca Stuart Nadeau Environmental and Regulatory Manager Tel stuart.nadeau@esso.ca Peter Clarke Procurement Manager Tel peter.clarke@esso.ca Roy Steinhauer Aboriginal Affairs Manager Tel roy.g.steinhauer@esso.ca Kim Fox Public Affairs Advisor Tel kim.j.fox@esso.ca Inquiries related to procurement, contracting and services should be directed to: Project Information Line Tel

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