Rick Kruger, chairman, president and CEO of Imperial Oil, speaks during the company's annual meeting in Calgary on April 25, 2013. Imperial has filed for regulatory approval for a new $7-billion oilsands project near Fort McMurray, Alta. (Larry MacDougall/Canadian Press)

Imperial Oil Ltd. has filed for regulatory approval for a new $7-billion oilsands project on its Muskeg lease about 45 kilometres northeast of Fort McMurray, Alta.

The energy giant says its proposed Aspen development would use steam-assisted gravity drainage technology to access a potential 1.1-billion barrels of bitumen. This method involves the injection of steam deep underground to liquefy the thick bitumen so it can flow.

Imperial also said it is considering the use of solvents to improve recovery — a method that is currently under study at a pilot project at Imperial Oil's huge Cold Lake oilsands operation.  

Development of the project will depend on regulatory approval, technical evaluation and market conditions, with a final investment decision not expected until 2017. Under that timetable, the first oil would start flowing in 2020.

Imperial is proposing a three-phase development, with that development phased in over the expected 40-year life of the project. Each phase would add 45,000 barrels-per-day of production. 

The $7-billion estimate for the total cost of the Aspen project is a "very preliminary" estimate, according to a company spokesman.

"As project definition advances and as market conditions evolve, obviously it has the potential to impact the cost estimate," Imperial Oil's Pius Rolheiser said.

Oilsands projects in northern Alberta have a history of going over budget. Earlier this year, Imperial revealed that the first phase of its Kearl project would cost $12.9 billion — $2 billion more than its revised 2011 forecast and $4.9 billion more than its first forecast.  

Imperial Oil is evaluating several potential oilsands developments in northern Alberta. They include the Corner and Clyden leases near Fort McMurray and the Grand Rapids project near Cold Lake.

With files from The Canadian Press