Canadian government clears Shell to expand Jackpine project

TORONTO Sat Dec 7, 2013 4:19pm EST

TORONTO Dec 7 (Reuters) - The Canadian government has granted approval for Royal Dutch Shell Plc to expand its Jackpine oil sands project in northern Alberta, a move that could boost production at the site by up to 100,000 barrels a day.

Canada's environment minister said in a statement late on Friday that after a review by a federal-provincial panel, the government concluded that the project was likely to cause significant adverse environmental effects. But it said those effects were justified and the project may proceed.

A Royal Dutch Shell spokesman said on Saturday the company was reviewing the recommendations and conditions attached to the approval.

"Proceeding with the project is subject to a final investment decision by Shell and the AOSP (Athabasca Oil Sands Project) joint venture owners," spokesman David Williams said in an email.

Shell's partners in the venture include Marathon Oil Corp and Chevron Corp.

Canada's oil sands, a major source of crude oil imports for the United States, are set for a massive expansion in coming years and Canada's Conservative government has been a big supporter of their development.

Environmentalists oppose expanding production, partly on the grounds that extracting oil from the clay-like bitumen is energy-intensive and the resulting greenhouse gas emissions are high.