Overview -

Keywords   Canada   oil sands   open pit

The Athabasca Oil Sands Project consists of the Muskeg River Mine and a pipeline to the Scotford Upgrader. Albian Sands operates the Muskeg River Mine and is a a joint venture of Shell Canada, Chevron Canada and Western Oil Sands Inc.

The project began operation in 2003 and has a projected mine life of 30 years. The Muskeg River Mine is an open pit operation that mines bitumen on a 121-square-kilometre lease, Lease 13. Muskeg River contains more than five billion barrels of mineable bitumen.

The mine is 75 km north of Fort McMurray, Alberta, 493 km northeast of Edmonton. A pipeline transports diluted bitumen from the mine to the upgrader near Edmonton.

Roughly 75 per cent of the bitumen can be recovered . . .

Muskeg River is a truck and shovel operation, with semi-mobile crushers. About two tonnes of oil sands must be dug up, moved and processed to produce one barrel of oil. Roughly 75 per cent of the bitumen can be recovered from sand; processed sand has to be returned to the pit and the site reclaimed. Bitumen extraction is done at a plant on the mine site, and diluted bitumen is piped to the Scotford upgrader.

Ownership Summary  Name: Royal Dutch Shell PLC    Interest: 60%    Note: public  Name: Chevron Canada Limited    Interest: 20%    Note: other  Name: Marathon Oil Corp.    Interest: 20%    Note: public Reference: 30-Sep-07

A natural gas-fired cogeneration plant at the Muskeg River Mine provides heat and electricity. Electricity not used on site is sold into the power market.

Location - The Muskeg Mine is 75 km north of Fort McMurray in northeastern Alberta, Canada. Fort McMurray is 435 km northeast of Edmonton on Highway 63, about 60 km west of the Saskatchewan border. The population of the area surrounding Fort McMurray is about 75,000.

Fort McMurray Airport is served by national, regional and charter flights to major cities and fly-in / fly-out bush camps. Flights are frequently booked to capacity because of the high transient worker population and people unwilling to drive on Highway 63. There is freight train service to Edmonton, but no passenger service.

North of Edmonton on Highway 2 is the town of Athabasca in the river valley of the same name. The town was once the major staging area for goods destined for the North. From Athabasca, Highway 63 goes to Fort McMurray. The town was founded in 1790 as a North West Company fur-trading post and is now the hub of the oil sands boom.

Four rivers meet at Fort McMurray: the Athabasca, Clearwater, Horse, and Hangingstone. Other than mining this is an area of outdoor activities -- hunting, fishing, cross-country skiing in winter, canoeing in summer. The Athabasca region is famous for freshwater fishing on its rivers and lakes. Six of the province's seven top fishing lakes are here. The angler can fish for for perch, northern pike, whitefish, lake trout, goldeye and arctic grayling.

Location Summary Nearest Landmark: FORT MCMURRAY Distance from Landmark: 75km Direction from Landmark: NORTH Latitude: 57 deg 19 min N Longitude: 111 deg 31 min W Satellite Image: <click to view>

The climate ranges from average temperatures of -19.8°C in January to +16.6°C in July. Annual rainfall is 334.5 mm and snowfall is 172.0 cm.

The other local winter activity is watching the aurora borealis. Guided tours take guests to prime viewing spots outside the city limits to watch the colourful effects in the sky. Depending on the conditions, the lower edge of visible light is 90 to 150 kilometres (54 mi to 90 mi) above the ground.

Property - Oil sands are found in three different deposits in northern Alberta: Athabasca, Peace River and Cold Lake. The Athabasca deposit is the largest of the three and has the most concentrated oil sands development.

The Muskeg River Mine is on Lease 13, a 121-square-kilometre area. In the first phase of the Project, the west side of Lease 13 is being mined from a reserve base estimated to contain 1.6 billion barrels (proved and probable) of bitumen. Expansion into the east side of Lease 13 and lease 90 would add another 3.2 billion barrels of bitumen resources. Expansion on two nearby leases 88 and 89 would add a further resource base of 3.9 billion barrels. The total available bitumen resource from these leases is 8.7 billion barrels.

Over 100 million years ago, as the Albian Sea covered the McMurray sands. Marine shale was deposited and trapped the hydrocarbons of the McMurray Formation.

Deposit Summary Deposit Type: sedimentary oilsands Primary Commodity: oil sands

The McMurray Formation of the Athabasca Oil Sands lies on an angular unconformity that truncates Devonian strata. In the area of Fort McMurray, Devonian strata comprise primarily limestone and calcareous shale of the Waterways Formation in the east and younger carbonate rocks of the Woodbend Group in the west. In general, the McMurray Formation accumulated in incised valleys that were formed by fluvial processes and subsequently transgressed by marginal-marine environments during an early Cretaceous sea-level rise. There is a continuum of sedimentary environments, from fluvial in the lower parts, to estuarine in the middle, to marine shoreface near the top.

Reserves Summary Name: Muskeg River Commodity: oil sands Class: Estimated 30 year mine-life Tonnage: 1.65 billion barrels Grade: unknown  Reference: 14 Apr 2003

The Lower McMurray is generally medium- to coarse-grained, massive-appearing to crudely cross-bedded, and contains no ichnofossils. These beds are commonly interpreted as fluvial. Middle McMurray deposits are dominated by inclined heterolithic stratification that may represent deposition on tidally influenced point bars with a brackish-water trace fossil assemblage interpreted as a fossil estuary. Upper McMurray deposits are variable, but generally contain a comparatively open marine signal. These strata are normally interpreted as shallow, low-energy shoreface deposits and small deltaic complexes.

Operation - Albian Sands Energy Inc. constructed and operates the Muskeg River Mine. First production of bitumen began on December 29, 2002. Production rates are designed to reach 270,000 barrels per day. The mine operates 24 hours a day, 365 days a year, subject to maintenance shutdowns. Bitumen is extracted and cleaned at the minesite extraction plant.

Ore is selectively mined to ensure a uniform blend is fed into the primary crushers and rotary breakers. The oil sands are removed from just below the surface by four electric shovels, hydraulic excavators, and 23 400-ton haul trucks and a combination of hydraulic and electric shovels . GPS technology is used to obtain real time information ensuring optimal efficiency and low operating costs.

Open pit mining is done in 12 to 15 meter high benches by shovel. Ore is removed by 240 to 400 ton trucks to the crushers where it is broken into 45 cm pieces and sent to a storage silo.

Mine Production Summary  Mine - Muskeg River    Capacity: unknown     Rate: unknown  Reference: ******

Muskeg River uses the IntelliMine wireless network communications system; with GPS for dozers and shovels; and dispatching system for automatic, optimized haul truck assignments. The system is used on a variety of equipment including 39 trucks, 7 dozers, 7 shovels, and 9 pieces of auxiliary equipment. Bucyrus has supplied four 495HF electric mining shovels to the mine.

Tailings from the initial years of production are stored in the External Tailings Facility and contained by a 12 km long ring dyke. In later operation, tailings will be stored in cells in the mine pit, separated from the active mining areas by in-pit dykes. Equipment had to be adapted for use in the oil sands environment. A crawler tractor which builds up the walls of the tailings ponds has its radiator and cooling fan on top of the cab to prevent dirt getting into the radiator.

Process -

After the oil sand is crushed at the mine site it is mixed with warm water and moved by pipeline to the extraction plant. The piping system is called a hydrotransporter. Hydrotransport is cost-effective and efficient. It conditions the oil sand while moving it to the extractor. It uses cooler water than previous conditioners. Conditioning starts the separation of bitumen from sand and breaks the bonds that hold bitumen, water and sand together.

In primary separation, blended slurry is fed into a primary separation vessel (PSV) and allowed to settle into 3 layers. Hot water is added to hasten the process. Impure bituemn floats to the top, sand sinks to the bottom, and middlings containing bitumen, sand, and water sits in the middle. Settling and separation takes about 20 minutes. The PSV has a rake at the bottom that pulls sand down and hastens separation. The sand and water are pumped into tailings ponds.

Air is injected into the middlings to create bitumen froth and recover a further 2 - 4% of bitumen during secondary separation. Bitumen from secondary recovery is recycled back to the primary system. The froth is heated with steam to approximately 80°C in a vessel called a de-aerator. The steam also removes excess air bubbles. Air must be removed to allow pumps to operate efficiently. Aerated froth causes cavitation which could destroy the pump.

Processing Summary  Facility - Muskeg River    Capacity: unknown     Rate: unknown   Product    Commodity: bitumen    Quantity: 155,000 barrels per day    Cost: 24.80 $/bbls    Note: increasing to 270,000 bpd Reference: ******

Bitumen froth contains on average 30% water and 10% solids, mainly clay. De-aerated bitumen is cleaned in counter-current decantation vessels.

Albian will supply 10 percent of Canada's oil needs ...

The counter-current decantation vessels mix solvent with the bitumen feed. Water and solids are removed to produce clean, diluted bitumen called dilbit. Tailings are sent to the tailings ponds. Dilbit is sent down the corridor pipeline to the Scotford Upgrader for further processing.

Environment and Community - Progressive land reclamation, involving filling the pit approximately every seven years and replanting vegetation, minimizes effects on wildlife and plants, reduces visual impacts and limits dust spread.

On-site cogeneration involves a highly efficient energy system that produces both electricity and heat from a single source, and turns otherwise wasted heat into a useful energy source. Greater efficiency means carbon dioxide emissions are reduced.

The environmental management system at Albian Sands has been certified in accordance with the ISO 14001 standard.