Imperial says Kearl oil sands production could begin in "weeks"

CALGARY, Alberta Wed Jan 2, 2013 5:08pm EST

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CALGARY, Alberta Jan 2 (Reuters) - Imperial Oil Ltd's Kearl oil sands project in northern Alberta could start commercial production in the coming weeks after a previous target was delayed from the end of December, a company spokesman said on Wednesday.

The 110,000 barrel a day bitumen development has been undergoing commissioning operations over the past several weeks in preparation for oil production.

"We're continuing the start-up process at Kearl and timing of first oil, expected in early 2013, will be dependent on our progress in the coming weeks," spokesman Pius Rolheiser said in an email.

Traders have said that impending production from the C$10.9 billion ($11 billion) development has been one factor behind a recent deepening of discounts on Canadian heavy oil, as export pipeline capacity remains limited.

Last month, Imperial Chief Executive Bruce March said he expected production from the project, which has been under construction since 2009, to slip from a previous target of late 2012 into 2013.

Imperial and its majority owner, Exxon Mobil Corp, are partners in Kearl, which will be Canada's fifth tar sands mining venture.

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