Imperial looks to oil sands expansion

Imperial Oil may dust off long-held plans for a C$1 billion (US$910 million) expansion of its massive Cold Lake oil sands project in northern Alberta that would increase output by 30,000 barrels per day, a company spokesman said today.

Imperial is revising the design of the expansion project, called Nabiye, potentially adding equipment to remove sulfur and an electricity-cogeneration plant that would produce steam for the thermal oil sands project.

"We're doing planning and design work right now," said Gordon Wong, a spokesman for the company, 69.6%-owned by ExxonMobil.

"We're looking at moving it along but no final decisions have been made on whether to proceed with the expansion or not."

The project was submitted to regulators in 2002 but the revisions being mulled by Imperial mean the company would need to seek new clearances from Alberta's Energy Resources Conservation Board.

"Because of the changes, it will likely require we go back to the regulator, at least with some amendments," Wong said.

The company does not yet know when it will submit its revised plan.

Imperial's Cold Lake project started commercial operation in 1983 and has since been expanded in phases.

The Nabiye project would be expansion phases 14 through 16 for the development, tapping reserves estimated at 250 million barrels.

Along with Cold Lake and a 25% stake in the Syncrude Canada joint venture, Imperial said in May it would go ahead with plans to build the C$8 billion Kearl oil sands project, the first new development in the region since the recession forced rivals to abandon a raft of proposed projects.

Imperial has not revised the capital cost of the Nabiye project since 2002.

However the Calgary Herald reported today that the cost of the expansion may have climbed to about C$1.3 billion.