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Oil in the

Times have never been better for Canadas oil sands mines, as John Chadwick discovered.
The Alberta Energy and Utilities Board estimates current established reserves [of oil sands] defined as those that are recoverable using current technologies at some 175 billion bbl placing Canada second only to Saudi Arabia in known economic reserves. Weve only seen the tip of the iceberg in terms of oil sands production with only about 3 billion bbl produced to date and that over a span of almost 40 years. It is expected that oil sands related production will double in the next

n 2004, Canadas oil sands production exceeded 1 million barrels per day (Mbbl/d), and will rise much further in coming years. Reviewing the oil sands sector earlier this year, Charles Ruigrok, Syncrudes CEO noted that Canadas oil sands is a tremendous resource that has the potential to help reduce North Americas growing dependence on offshore sources of crude oil supply. Canada is the worlds third largest producer of natural gasand the ninth largest producer of crude oil. The oil and gas industry is the largest private sector investor in Canada. And Canada is also well positioned to grow its energy sector. We enjoy secure and efficient access to markets we can readily access our resource base and our energy industry is globally competitive.

10 years and that it will continue to grow. Some projections suggest production could reach as much as 5 Mbbl/d. About 80% of the estimated 300 billion bbl of recoverable bitumen will require some

Main picture: At Albion Sands Muskeg River, 400-t Caterpillar 797B haul trucks carry raw ore to the Thyssen Krupp crusher.

Canadas massive oil resource

e sand pit
sort of in situ process as they are too deep to economically mine. Costs are higher than those for conventional production, but the oil sands industry has a number of competitive advantages, as Suncors Mike Ashar, Executive Vice President, explains. First, very little exploration is required to establish the location, size and quality of reserves. At minimal cost, the location and size of oil sands deposits can be determined with a high degree of accuracy. Second, overall recovery rates at about 90% are much higher than for conventional crude. Combined, these two considerations offer a known and stable reserve base with long-term recovery certainty. Third, the Alberta and [Canadian] federal governments have introduced royalty and fiscal regimes that recognize the large scale, up-front capital investments required for oil sands development and the long-term nature of project payouts for both developers and the economy as a whole. Fourth, we have direct and secure access to the US market. There are many challenges facing the oil sands industry, not least that of environmental stewardship

Oil sands are a mixture of sand, bitumen and water. Each grain of oil sand has three layers: an envelope of water surrounding a grain of sand, with bitumen surrounding the water to form the outer layer. Bitumen is a heavy viscous crude oil, which contains high amounts of sulphur and will not flow through rocks, wellbores or pipelines in its naturally occurring state. However, it can be processed into high quality, synthetic crude oil (SCO) that is in demand for upgrading to gasoline and jet fuels and other refined products. Most of Canadas oil sands are found in Alberta, and the highest quality resources are the Athabasca deposits of northern Alberta. The mineable Athabasca oil sands are found in thick seams 17 to 50 m below surface, making them ideal for open pits. Hydraulic face shovels and backhoes, and electric shovels load the bitumen ore into the largest haul trucks available. All the worlds large truck manufacturers, except Belaz, have units in Athabasca.

The newest of the mines is Muskeg River, where ore is dumped into a crusher to reduce it in size to lumps less than 410 mm, and then fed to rotary breakers for further crushing to less than 50 mm. Waste rock is rejected and warm water (40C) is added to create a slurry, which is pump to the oil extraction facility. Western Oil Sands is a 20% partner in the $5.7 billion Athabasca Oil Sands Project (AOSP), along with partners Shell Canada (60%) and Chevron (20%). AOSP is one of the largest projects in Canada and among the top 10 in the world in terms of size and complexity. Muskeg River mine lies 70 km north of Fort McMurray, Alberta. Ore is mined and bitumen is extracted from the sand, diluted and shipped via pipeline to the Upgrader. The initial capacity is 155,000 bbl/d.

Bucyrus 495HF shovels are equipped with wide crawler links to give the shovel the ability to operate in the soft underfoot conditions found in oil sands

AOSP Expansion
The Muskeg River mine expansion includes developing additional areas on the west side of Lease 13 and Lease 90, adding another bitumen extraction train to the existing plant and a number of de-bottlenecking projects. These plans will increase the capacity of the mine from 155,000 to some 300,000 bbl/d. This, combined with the Jackpine mine approval, received in 2004, would provide the AOSP with regulatory approvals for mining developments encompassing all of Lease 13, 90, 88 and 89, totaling 500,000 bbl/d of bitumen. Western is providing the AOSP with mining expertise, project management and financial stewardship. Jackpine phase one is likely to start in 2008. It will be a new, stand-alone 200,000 bbl/d mining and extraction project on the eastern portion of Lease 13. Development will follow expansion of the western portion of Lease 13. Then Jackpine phase two will access the resources on Lease 88 and 89 and provide an additional 100,000 bbl/d of production.

and on the Horizon


Teck Cominco recently became the first major mining company in the Athabasca oil sands (excepting BHP-Billiton which pulled out some years ago and its expertise became Western Oil Sands). Teck Cominco is in with UTS Energy and Petro-Canada for a 15% interest in the Fort Hills project. Fort Hills, located about 90 km north of Fort McMurray, is a long-life asset with 2.8 billion bbl of bitumen resource. Regulatory approvals are in place for up to 190,000 bbl/d of bitumen production, with initial start-up by the end of the decade. Plans include an integrated upgrader. Recent activity in new mining projects has been strong, as might be imagined with the price of oil. There is Canadian
26 International Mining December 2005

Natural Resources Ltds (CNRL) Horizon project 70 km north of Fort McMurray, where CNRL owns and operates leases covering 46,540 ha. Drilling on the leases indicates an estimated 16 billion bbl of bitumen in place, with approximately 6 billion bbl recoverable. The plan sees three phases of development over a seven-year period from 2005 through 2012. SCO will be produced during the second half of 2008 ramping up to a rate of 110,000 bbl/d. The second phase is expected in 2010 with an increase in production of 45,000 bbl/d. The third and final phase is expected in 2012 and will bring total production to 232,000 bbl/d of SCO. This will require the mining of 1.152 Mt/d of material to yield 521,000 t/d of oil sands. Imperial Oil announced the filing of regulatory applications in July for the Kearl Oil Sands project. This would be located on portions of oil-sands leases held by Imperial and ExxonMobil Canada in the Kearl Lake area, about 70 km north of Fort McMurray. The current plan is to develop in a staged manner, with an initial mine train with production capacity of about 100,000 bbl/d. On October 12, Synenco Energy released an updated Public Disclosure Document for the Northern Lights project, an integrated project to be located 100 km northeast of Fort McMurray. It is in the design and engineering stage and is jointly owned by Synenco Energy and SinoCanada Petroleum. When fully operational, Northern Lights will produce 100,000 bbl/d of light, sweet SCO. Two phases of development are expected; each phase is targeted to produce 50,000 bbl/d, with the first targeted to come on stream in late 2010. Deer Creek holds an 84% working interest in, and is the operator of, the Joslyn project. Its estimated life is more than 30 years, encompassing three phases of Steam Assisted Gravity Drainage (SAGD) recovery and four stages of oil

sands mining and extraction. The staged development of both SAGD and mining resources is expected to produce more than 200,000 bbl/d. Each mining phase is expected to put 50,000 bbl/d into the mix and the four are expected to come on stream in 2011, 2014, 2017 and 2020. Fort McKay First Nation has publicly discussed plans for a 35,000 bbl/d mining project near the settlement of Fort McKay. Timing at this stage is uncertain.

The establishment
Currently there are three surface mining operations, Syncrude (the largest of the miners), Suncor and Albian Sands (Muskeg River). Last year, production at Syncrudes operation, reached 87.2 Mbbl, or about 238,000 bbl/d. The company is in the midst of a major expansion that will see capacity grow to 350,000 bbl/d in mid 2006, maybe even to 500,000 bbl/d at some point in the future. Oil sands mining is messy, but the companies involved make extensive efforts to reclaim the land they disturb. Syncrude, for example, is an international leader in reclamation research, and this work is proving very helpful in reclaiming mining land back to a natural state. One of its more successful reclamation projects involved the repatriation of Wood Bison to the area in 1993, after an absence of more than 100 years. What Syncrude aimed to do was test the viability of reclaimed land for large animal habitat, and it has been a roaring success, according to Ruigrok. Our herd now averages about 300 head of award winning animals, and it has a 99% calving rate. This project is a joint venture with the neighboring Fort McKay First Nation, which co-manages the bison ranch. Suncors crude oil production is about 260,000 bbl/d, with downstream refining capacity for about 160,000 bbl/d. Suncors oil sands leases hold a potential 11 billion bbl of synthetic crude oil after upgrading. Suncor plans to invest about

$2 billion/y over the next several years with most of that sum directed to oil sands. It plans to take production to 500,000 bbl/d around 2010. Suncors Ashar explains some of the challenges to growth. These include: G Controlling the operating cost of daily production and the capital costs and related labour demand to build and operate the facilities G The environmental impacts of a growing industry G Pipeline capacity to get the oil sands crude to markets He notes that operating costs for oil sands are higher than those for conventional production a median of about $20/bbl for upgraded light crude. While that is considerably higher than average global lifting costs, it comes with an exploration cost of near zero, compared to a global average of about $11/bbl. On a full cycle basis that means that oil sands production is competitive with domestic conventional crude. Operating costs are, however, constantly under pressure in particular from the rising cost of natural gas energy used to process the heavy crudes into refinery ready products. When we look at future opportunities and how fast we can bring on production, we need to remember that these are massive projects. Projects take five or more years from conception to completion. And more than time they take money and skilled labour. As an industry, we are looking at some $35 billion in new construction in the oil sands in the next five years..

Hitachi developed the ultra-large hydraulic excavator EX8000 as the largest class in the world, with an operating weight of 780 t and a shovel bucket capacity of 40 m3

Leviathan loaders
The projects in the oil sands are massive, and so is the mining equipment. Hitachi developed the ultra-large hydraulic excavator EX8000 as the largest class in the world, with an operating weight of 780 t and a shovel bucket capacity of 40 m3. The machine exceeds the operating weight and loading shovel bucket capacity of the EX5500-5 by 260 t and 11 m3, respectively. Hitachi says it is the perfect match for 280-t trucks. It boasts awesome power and productive output as the largest class ultra-large hydraulic excavator in the world, with an arm crowding force of 2,870 kN and breakout force of 2,230 kN. The EX8000 features the latest technologies and structure, with an operating speed equivalent to the EX5500 despite the larger body. It features a roomy, comfortable cab with living quarters! The rear of the wide cab acts offers living space with a table, microwave and other conveniences to ensure comfort in even the harshest mines, like those in the Athabasca oil sands. The cab is almost twice the size of the cab on the EX5500.
28 International Mining December 2005

Electronic wrist controls ensure light, smooth manoeuvring with a light touch, thereby reducing fatigue over long periods of operation. Four wide-angle cameras, located on the two back corners as well as on the right side and under the cab, feed a colour monitor to give the operator an excellent split-screen view all around the machine. The EX8000 shares a common design with the EX3600-5, with shovel-type tracks and triple-roller swing bearing, and employs proven, highly durable systems and components. Furthermore, it was designed for maintainability and accessibility with large access doors, large open spaces and a flat floor around the engine for easy maintenance and inspection, as well as an electric retractable ladder allowing easy access to equipment. It really is a monster, when the bucket reaches its maximum cutting height, it can touch the top of a six-story building. It uses two Hitachi S16R engines that generate combined power of 2,800 kW. Its overall height is 9.9 m and the undercarriage length is 10.5 m, with track shoes 1.85 m wide. Its maximum digging reach is 18.5 m. The first EX8000 underwent field tests in the oil sands. Dean Coleman, Sales Manager with Hitachi dealer Wajax Industries was very impressed with the EX8000 and the support the Hitachi organization has given us. Were very thankful to have a great customer like North American Construction Group who is dedicated to the Hitachi line. O&K Minings RH 400 hydraulic shovel was developed especially for the oil sands. It has twin engines, either Cummins QSK60s or Caterpillar 3516s. Its fuel capacity is 16,000 litres, allowing 24-h continuous operation without refuelling. The bucket capacity is 80-90 t and maximum digging height 17.1 m. This monster uses 10,000 litres of hydraulic

fluid. Eight main pumps move 8,000 litres/min and produce a breakout force of 2,100 kN. The latest Bucyrus order for Fort McMurray is for two 495HF electric mining shovels for Syncrudes Mildred Lake mine. The 495HF has proven to be an extremely productive and reliable tool in oil sands. Bucyrus 495 High Performance Series Shovels (495HF high flotation and 495HR hard rock) carry the new SuperCab, designed for operator comfort, efficiency and work-face visibility. Increased power allows the 495 a 100-t single pass capability. It can provide up to 109-t capacity when specified. Powered by the latest Siemens AC-IGBT drive system technology, the brushless AC motors and fuseless drives are setting new standards for reliability and efficiency in the unique oil sands environment. The four 495HF shovels at Albian Sands Muskeg River mine are very successful. The 495HF has the field proven lower works design of the popular 595B shovel in operation at other oil sands operations. It is equipped with wide 3.556 m crawler links, which give the shovel the ability to operate in the soft underfoot conditions found in oil sands. The addition of a Bucyrus FastFil dipper with new spade lip design makes this a most productive electric rope shovel. The dual output planetary hoist and swing provide for reduced maintenance as compared to single pinion designs. The optimized stress-relieved boom structure maximizes structural life (an exclusive feature.) The electrical system is second to none in the industry, states Mike Onsager, Bucyrus Director of Electrical Engineering. P&Hs 4100TS shovel is another popular machine around Fort McMurray, operating at 15,000 V. Its working weight is 1,351,558 kg and its suspended load capacity is 154,360 kg. The dipper capacity is 47.4 m3 and the boom length,

Canadas massive oil resource


21.34 m. Its travel speed is just 0.84 km/h on crawler shoes of 3.54 m. Two new P&H 4100BOSS shovels have joined two other P&H 4100BOSS machines and two P&H 4100TS shovels at Suncor. The new machines will bring the total of P&H Model 4100 shovels operating in the Canadian oil sands to 17. Suncor put the first P&H 4100TS oil sands machine to work in October 1998. Since then, this machine has averaged an impressive 7,300 gross operating hours a year in this challenging application. among the largest in mining and serve two major functions: levelling the land at the overburden dump and working above the shovel/truck operation to push material to the shovel. In the winter, when the oil sands freeze and become very hard, they serve the added purpose of ripping through the frozen sand. In an environment where high availability and large production is demanded, giant machines like Komatsus D475 offer the blade capacity and pushing power required to keep up with demand both above the shovels and in the reconstitution of overburden (most often for dam construction). One reason Suncor chooses larger class dozers is the productivity required to keep up with the very large loads of dirt coming off the haul trucks. It takes a lot of pushing power, and big dozers have the productivity to keep up with overburden being produced by big shovels. Komatsus D475, for example, is equipped with a standard U-blade with a 34-m3 blade capacity. Ground Engagement Tools (GET) such as blades and rippers, along with a dozers undercarriage, are among the items that wear excessively in the abrasive, sticky oil sand and require frequent overhauls (hardfacing) and replacement. All the earthmoving equipment in the oil sands is subject to extreme wear. Oil sand could have been designed to be a grinding compound something really hard put it in a matrix with some real sticky material to get good contact. In a hard rock mine a 12-14,000-hour undercarriage life would not be uncommon. In the oil sands, it is more like 2,500 to 3,000 hours because of that wear. Tailings dozers endure really nasty working conditions. The dozers at work in tailings cell construction are of a size class generally associated with heavy construction, but outfitted with unique features that make them a perfect match for this mining application. Suncor relies on low ground pressure dozers such as Komatsus D85PX-15 (27,550 kg) and D155AX-5 (39,193 kg). Larger dozers similar in size to the D475 will come into the area first to build a dry dike on the four sides of the cell roughly 5 m high. A spill box is placed strategically on one side so that the water portion of the tailings slurry can escape into the pond, while the D85s and D155s then work to level and pack the solids as they are pumped into the cell. While described as solids, the material these dozers are working on is anything but solid, requiring a number of alterations to the machine that make them fully operational in this substance and safe for the operator. Components such as the radiator, air conditioning condensers, coolers, etc., all have to be mounted on the top of the cab. These machines are typically running anywhere from millimetres to, at the extreme, 0.5 m deep in this slurry. Conventionally placed radiators mean machines are constantly and perpetually overheating by getting plugged up with very fine clay particles, bitumen and heat a deadly combination to plug up a cooling system. Safety is a prime concern, with the risk of a dozer becoming submerged in the slurry being very real, these machines come equipped with an escape hatch on the roof of the machine for operators to make an easy, safe exit. Every 500 hours, oil sands dozers spend 12 hours in a steam bay being washed, scoured of sand and thoroughly inspected for excessive wear on the tracks, GET and structural components. IM

Monster movers
Most of the mining industrys largest haul trucks can be found in the oil sands. These include Komatsu 830Es (218 t), Komatsu 930Es (290 or 308 t), Caterpillar 797s (330 and 345 t) and 370-t capacity Caterpillar 797Bs and Liebherr T 282 Bs. Empty, the Caterpillar 797B weighs 623,690 kg. It is powered by the 3524B Series, 24cylinder diesel engine to give a maximum speed of 67 km/h. It features independent, self-contained, oil-pneumatic suspension cylinders on each wheel. It is 7.6 m high, 14.5 m long and the body width is 9.8 m. Its fuel capacity is 6,814 litres. The engine output of the T 282 B is 2,013 - 2,722 kW. The maximum operating weight of this monster is 592 t and its maximum travel speed is 64 km/h. It employs a Siemens/Liebherr AC drive system. One tyre for a 370-t truck costs over C$35,000. Each tyre is 4 m high and weighs more than 15,000 kg. Ideally each tyre will have a life span one year to 15 months. Waste tyres are then re-used as cattle feeders, childrens play ground features, and perimeters at look out areas at the mine sites.

Defiant dozers
The bulldozer is one of the workhorses of the oil sands. It toils both in the abrasive sand above each shovel and in the tailings at the end of the extraction process. A closer look at the day-to-day workings of a Suncor oil sands dozer shows how these are some of the hardest working machines on earth, handling one of the heaviest, most abrasive materials encountered by equipment anywhere. The main production dozers at Suncor are

Komatsu D475 dozers are popular in the oil sands, where they cope with very abrasive conditions