Project Description Update –
Kearl Mine Development May 2006
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.
WB00200 06 05
PROPOSED DEVELOPMENT exploring for and producing oil and natural gas,
The Kearl Oil Sands Project is a potential oil-sands refining and marketing petroleum products, and
mining, pipeline and upgrading project in Alberta, manufacturing and selling petrochemicals. It has
proposed by Imperial Oil Resources Ventures about 5,100 employees in two operating divisions -
Limited (Imperial Oil) and ExxonMobil Canada the Resources Division and the Products and
Properties (ExxonMobil Canada). Imperial Oil Chemicals Division.
Resources, as designated operator, submitted the Resources Division
mine application (leases included in Kearl Imperial's Resources Division manages the
application are shown in figure) and related company's natural resource operations and is based
environmental impact assessment to the Alberta in Calgary, Alberta. It is one of Canada's largest
Energy and Utilities Board and Alberta Environment producers of crude oil and natural gas. It is a
in July 2005. The company responded to the leading developer of Canada's vast oil sands
regulators' information requests in March 2006 and resources through its 25 percent ownership of the
expects to hold public hearings in the second half of Syncrude project and its operations at Cold Lake,
2006. 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
Imperial Oil advancing the development of natural-gas
Fort McKay 6 resources in the Mackenzie Delta region of
Canada 87 Canada's Far North. The company also operates 18
Syncrude 31A pipelines and has ownership interests in several
Deer Creek Shell 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
Suncor 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 Kearl
The chemicals group operates four manufacturing
WHO ARE WE? plants and a number of strategically located
Imperial Oil Limited distribution centres across the country. It's one of
Imperial Oil Limited is Canada's largest integrated the largest chemical companies in Canada.
(production, refining and product delivery) Chemical products include primary petrochemicals,
petroleum company. It's a leading producer of crude plastic resins, solvents and additives for lubricating
oil and natural gas and a major company by
international standards. The company's focus is on
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 Leases 36, 31A and 88 in the Athabasca region.
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 2018. Maximum
production could be up to 345,000 barrels-a-day.
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.
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.
Following is a preliminary schedule for the project.
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
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
Engineering, Procurement and Construction
Construction of Second Train
Second Train Start-up
Third Train (2018)
Preliminary Development Concept
Shovel Trucks Crusher Conveyor Slurry Plant Oil Sands Slurry
Froth Treatment Diluent Extraction
To Market Recycle Water
PROPOSED FACILITIES AND OPERATION
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 Leases 6 and 87.
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.
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 Kearl upgrading
capacity or related pipelines to support future
mine phases would be the subject of a
Proposed Mining Sequence
R11 R10 R9 R8 R7 R6 W4
Tailings (a mixture of fine clay, Proposed
sand and water) are a by-product Winter Road
of the bitumen-extraction process. Pr
w N T98
Po W a
The application includes an w e te r
e e lin
McClellend Lake e Fir e
bag R ive r
external tailings area in the
northeast portion of Lease 6. External
Conventional tailings-treatment Plant Site
technology is planned for use until Bitumount
tailings can be stored in a East
depleted mine pit, at which time
consolidated tailings technology Kearl
will be implemented. This will
Industry Hot T95
allow Imperial to minimize surface Airstrip
disturbance, reduce the ultimate Steepbank Gas Pipeline
fine tailings volume and Fort
accelerate the reclamation of
the external tailings area.
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 Kearl 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 Kearl Lake. The
extension will have a water depth greater than Kearl Lake providing better over-wintering habitat and
improving the fish resource in the lake.
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.
ENVIRONMENTAL MANAGEMENT R8 R7 R6 W4
Company Commitment Water
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. Lease
88B Lake T96
The companies' current operations incorporate
extensive environmental design and protection
measures to mitigate effects on water, land and air Lake
Lease 36 Lease 87
quality. In addition, a variety of ongoing 31A 2 0 2
consultation forums provide the public with IOR Map No.: 074-0050-365-121
opportunities to review and provide input to the R8 R7 R6 W4
companies' environmental performance and future
Mining operations will change the landscape and Lease 6
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 Proposed
for 20-25 years. When project lands are used later Lease
in the life of the project, the lands used earlier will
be reclaimed. The intent is to engage stakeholders Kearl
in reclamation planning so that, to the extent Lake
Lease 36 Lease 87
2 0 2
practical, lands reclaimed will have traditional land 31A
use capability and available access. Progressive IOR Map No.: 074-0050-365-122
reclamation will continue throughout the life of the R8 R7 R6 W4
project. The graphics show the planned status of Closure
the site at four different time periods throughout
the operational life of the mine.
R8 R7 R6 W4
6 Lake T96
Lake Lease 36 Lease 87
Proposed 31A 2 0 2
Lake T96 Kilometres
IOR Map No.: 074-0050-365-110
Lake Lease 36 Lease 87 Reclaimed Areas
Lease Proposed Water Management Areas
31A 2 0 2
T95 Surface Water Diversions
Active or Non-Reclaimed Mine Areas
IOR Map No.: 074-0050-365-120
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
• Investment of an estimated $5 to 8 billion
(2005 $CDN) to develop the Kearl 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.
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 Roy Steinhauer
Kearl Oil-Sands Development Manager Aboriginal Affairs Manager
Tel. 403-237-3202 Tel. 403-237-3710
Stuart Nadeau Kim Fox
Environmental and Regulatory Manager Public Affairs Advisor
Tel. 403-237-3966 Tel. 403-237-3889
Peter Clarke Inquiries related to procurement, contracting and
Procurement Manager services should be directed to:
Tel. 403-237-2644 Kearl Project Information Line
firstname.lastname@example.org Tel. 1-888-666-7617