Canadian oil sands startup Athabasca Oil Corp said Monday it would start an environmental impact study as part of plans to expand its Hangingstone oil sands facility in northern Alberta to 82,000 b/d.

"We currently hold regulatory approval [from the Alberta government] to construct, operate and recover 12,000 b/d of bitumen from the first phase and are now preparing to submit an application to increase production by 70,000 b/d in two separate phases," Athabasca Oil said in a statement.

Phases 2 and 3 will each have a capacity of 35,000 b/d and will be developed by 2017 and 2018 respectively, it said.

The application will be submitted to two provincial regulators, Alberta Environment and Sustainable Resource Development and the Energy Resources Conservation Board.

The Hangingstone project, which will utilize the steam-assisted gravity drainage technology, will be 20 km (12 miles) southwest of Fort McMurray and holds probable reserves of 118 million barrels.

Last November, Athabasca Oil's board of directors sanctioned the first-phase development of the facility committing to spend some C$536 million ($538 million) to build a central processing facility and 20 SAGD well pairs, on four well pads.

"We expect to develop the thermal project at a cost of C$44,700/barrel [b/d of production capacity].

The drilling of SAGD well pairs is planned to commence in mid-2013 with facility commissioning and start-up in fourth-quarter 2014. First bitumen production is targeted in early 2015," the company said then.

Besides Hangingstone, Athabasca Oil is also developing another oil sands facility in Alberta under a C$1.9 billion deal it signed in 2009 with PetroChina.

Called Dover, the project will have a capacity of 250,000 b/d and will be built in five equal phases. The SAGD facility will be 95 km (61 miles) northwest of Fort McMurray.

Construction of the first phase will begin in 2013 and initial steaming into the well pads is due to start in 2015.

On February 7, the ERCB issued a notice stating it would start hearings in early April at Fort McMurray into an application filed by Dover Operating Company to build and operate the facility.

Dover Operating Company is a 60:40 joint venture between Athabasca Oil and PetroChina.

The project is facing opposition from the Fort McKay First Nation group in Alberta, who argue that the Dover Operating Company has not agreed to their plea to create a buffer zone to protect adjacent wilderness near Namur and Gardiner Lakes.

"Over the years, we have supported sustainable oil sands and economic development for our community. But the Dover project will seriously impact the last remaining traditional reserve land on the west side of the Athabasca River," said Dayle Hyde, a group spokesman.