By BEN DUMMETT
TORONTO -- Imperial Oil announced Saturday the startup
of the initial phase of its Kearl oil sands project in
northeastern Alberta, a project the Calgary energy company is
counting on as key source of crude for more than 40 years.
The project has been plagued by cost
overruns, and initial production comes amid an uncertain
outlook for Canadian heavy oil prices because of a shortage of
pipeline capacity to the US and increased light oil production
in that country.
Imperial Oil, majority-owned by ExxonMobil, said in February
the final cost for Kearl's initial development is expected to
be 12.9 billion Canadian dollars ($12.69 billion), up from
C$10.9 billion in 2011.
Located in the Athabasca region of northeastern Alberta,
production from Kearl's initial development is expected to
reach daily production of 110,000 bbl by later this year.
Expansion of Kearl will add another
110,000 bpd by late 2015, and the project has the potential to produce
a regulatory capacity of 345,000 bpd by about 2020, Imperial
Oil said in its release.
"Kearl is the largest project we've ever undertaken and the
beginning of a period of substantial growth for the company
that will see us double production to more than 600,000 barrels
per day by about 2020," Rich Kruger, Imperial Oil's chief
executive, said in a release.
Opposition from environmental groups is one of the biggest
challenges oil sands developers face because crude produced
from these operations is more carbon intensive to produce than
many other types.
Imperial Oil made a point to highlight the advanced
technologies used at Kearl to reduce the project's environmental impact.
"Diluted bitumen produced from Kearl will have about the
same life-cycle greenhouse-gas emissions as many other crude
oils refined in the United States as a result of technologies
which significantly enhance environmental performance," the
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