Upload
others
View
2
Download
0
Embed Size (px)
Citation preview
An Introduction to An Introduction to Development in Alberta’s Oil Development in Alberta’s Oil
SandsSands
Presented ByPresented ByRob EngelhardtRob Engelhardt
Marius Marius TodirescuTodirescuFebruary 20, 2005February 20, 2005
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 22
AgendaAgenda
• Introduction• What are Oil Sands?• Alberta’s Deposits• Exploitation Methods and Upgrading• Emerging Technologies• Economic Perspective• Future Challenges• Conclusions
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 33
IntroductionIntroduction
• Alberta’s Oil Sands are one of the worlds largest hydrocarbon reserves
• 1.6 Trillion barrels in total• 178 Billion barrels economically recoverable at this
time
• To this date, over C$20 Billion has been invested in various projects – with over C$60 Billion in new investments coming over the next 5 – 10 years
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 44
IntroductionIntroduction
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 55
What are Oil Sands?What are Oil Sands?
• Oil Sand is a mixture of bitumen, quartz, clay, water and traces of other minerals
Composition of Alberta Oil Sand
Bitumen Water Inorganic Material
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 66
Alberta’s Oil Sands DepositsAlberta’s Oil Sands Deposits• Oil sands
located in 54,400 sq. mi. area in NE part of province
• There are three major deposits
Calgary
Edmonton
Ft. McMurray
Cold Lake
Peace River
Province of AlbertaProvince of Alberta
CanadaCanada
Source: Syncrude Canada
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 77
Alberta’s Oil Sands DepositsAlberta’s Oil Sands Deposits
Source: Syncrude Canada
• Low overburden regions = CHOPS or Mining• Increased overburden = SAGD, CSS, etc.
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 88
Oil Sands Exploitation MethodsOil Sands Exploitation Methods
• Mining Based Bitumen Extraction(for close to surface deposits, >90% recovery rate.)
• In Situ Methods -Steam Assisted Gravity Drainage (SAGD)(for deep deposits, 40-70 % recovery rate.)-Cyclic Steam Stimulation (CSS)(for deep deposits, 20-25 % recovery rate.)
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 99
Shovel/Truck
Cyclofeeder
Low EnergyExtraction
Slurry Pipeline
Feeder/Crusher
New: Shovel/TruckSource: Syncrude Canada Ltd.
Dragline Bucket wheel
Conveyor
DumpPocket Conveyor
Hot WaterExtractionOld: DL/BWR
Mining and Extraction Mining and Extraction TechnologiesTechnologies
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 1010
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 1111
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 1212
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 1313
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 1414
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 1515
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 1616
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 1717
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 1818
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 1919
•
SIZING
Process Water
11
22
33
44
55
66
Truck & Shovel Mining
Crushing & Conveying
Slurrying
Rejects Processing
Slurry Pumping
Bitumen Separation
Slur
ry
Tails
Bitumen
Process SchemeProcess Scheme
Source: Syncrude Canada Ltd.
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 2020
CSS CSS –– Cyclic Steam StimulationCyclic Steam Stimulation
Source: EnCana
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 2121
SAGD ProcessSAGD Process
Source: Japan Canada Oil Sands Ltd.
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 2222
Upgrading ProcessUpgrading Process
Source: Alberta Chamber of Resources
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 2323
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 2424
Oil Sands: Products and ByOil Sands: Products and By--productsproducts
Source: Syncrude Canada Ltd.
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 2525
Specific IssuesSpecific Issues• Land disturbance
– Mining
• Water Conservation – Tailings Processing
• Gas Dependency – H2 for upgrading, in situ methods – steam generation
• Air Emissions – CO2, SO2, NOx, H2S, (CO), methane and other volatile
organic compounds (VOCs), ozone and particulates
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 2626
Emerging TechnologiesEmerging Technologies•Nexen-OPTI Project
•Improvement on existing SAGD technology
•Involves SAGD with an integrated onsite upgrader
•Fuels produced on-site- eliminates the dependency
•Use synthetic gas produced from heavy bottoms, or ashphaltenes contained in the bitumen
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 2727
Emerging TechnologiesEmerging Technologies
• VAPEX (Vapour Extraction Process)– Technically similar to SAGD but instead of steam
solvent is being injected into the oil sands resulting in significant viscosity reduction. lower injection pressure and temperature
– Improved energy efficiency– No emulsion – Partial upgrading within the reservoir resulting from
the precipitation of asphaltenes from the bitumen.
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 2828
ToeToe--toto--Heel Air InjectionHeel Air Injection-- THAITHAI
Source: University of Bath
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 2929
Emerging TechnologiesEmerging Technologies• Most technology designed with the
objective of reducing the amount of Natural Gas used in exploitation
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 3030
Economic ConsiderationsEconomic Considerations
• Markets• Capital and Production Costs• Government Policy
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 3131
MarketsMarkets
• Two Challenges:• Most refineries cannot accept bitumen/blends as
inputs• Projected growth may outpace market growth
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 3232
MarketsMarkets
• Oil sands producers strategies to access markets:
• Buying refineries• Entering into long term contracts so that refineries
can justify spending money on additional facilities• Producing tailored products that can be used by
specific refineries• Upgrading to SCO
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 3333
MarketsMarkets
• Typically, increases in Canadian crude production have easily been absorbed by the U.S. market
• Oil sands growth will be much larger than previous experience
• U.S. energy demand is growing and conventional reserves are in decline
• Other potential markets - Asia
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 3434
MarketsMarkets
http://www.eia.doe.gov/
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 3535
Capital & Production CostsCapital & Production Costs
C$C$CrudeRecovery Type
22 to 2812 to 18SCOIntegrated Mining/Upgrading
12 to 166 to 10BitumenMining/Extraction
11 to 178 to 14BitumenSAGD
13 to 198 to 14BitumenCSS
12 to 166 to 9BitumenCHOPS
10 to 144 to 7BitumenCold Production
Estimated Operating and Supply Costs By Recovery Type
Source: National Energy Board
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 3636
Government PolicyGovernment Policy
• Alberta government owns 97% of the bitumen in the province
• Royalty System• Until 1996, Royalties negotiated on a
project by project basis• Oil Sands Royalty Regulation
• 1% of Gross Revenue before project payout• 1% of Gross Revenue + 25% Net Revenue after
project payout
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 3737
Future ChallengesFuture Challenges
• Capital Cost Overruns and Labour Constraints
• Natural Gas Supply
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 3838
Capital Cost Overruns & Labour Capital Cost Overruns & Labour ConstraintsConstraints
• Largest problem facing oil sands projects is capital cost overruns
• Usually related to availability of qualified trades people
• In terms of total supply cost, a 25% capital cost overrun means a loss of $3.70 per barrel of SCO
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 3939
Capital Cost Overruns & Labour Capital Cost Overruns & Labour ConstraintsConstraints
Source: National Energy Board
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 4040
Natural Gas SupplyNatural Gas Supply
• Both mining and in situ recovery methods use a great deal of natural gas
Source: National Energy Board
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 4141
Natural Gas SupplyNatural Gas Supply
• It is anticipated that by 2010 oil sands production will use 1.2 Bcf per day
• Alberta’s total NG reserves are expected to be 14.5 – 16 Bcf/d
• Solutions:• McKenzie Delta/Beaufort Sea NG• Emerging Technologies
5/11/20055/11/2005 Presentation to University of HoustonPresentation to University of Houston 4242
ConclusionsConclusions
• Keys to continued growth of oil sands – WTI price of $24USD– Continuous cost improvements– Increase number of qualified trades– Further development of emerging in situ
technologies