Shell's Carmon Creek oilsands project gets green light

Royal Dutch Shell says it's moving ahead with its Carmon Creek oilsands project in northern Alberta.

The announcement came Thursday, the same day that Suncor Energy Inc said its Fort Hills oilsands mine north of Fort McMurray was a go.

The expensive projects are going ahead despite uncertainty about the approval of major export pipeline proposals such as Keystone XL and Northern Gateway and uncertainty over how much foreign investment Ottawa will permit in oilsands development.

Shell gave no price-tag for its steam-driven project in the Peace River region, but it is expected to cost billions. It put the same project on hold three years ago to save money.

Carmon Creek will produce 80,000 barrels of oil per day to be refined at existing refineries. About 1,000 workers will be needed to build it, Shell said.

"Shell's Peace River oil leases represent a significant development opportunity.” said Lorraine Mitchelmore, president and country chair of Shell Canada.  

“Our decision to invest in Carmon Creek has been carefully studied with the goal of designing a project that is competitive from a commercial, technological and environmental perspective."

She pointed to environmental improvements in the project, including maximizing water recycling and a cogeneration plan that will also feed up to 500 mW of electricity into the Alberta energy grid.

Once the project is up and running the aim is to virtually eliminate the need for freshwater use for steam generation through recycling of water produced with the oil.

Shell received approval for the 100-per-cent-owned project from the Alberta energy regulator in April 2013.