Canada's Oil Sands - Centre for Energy

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Upgrading Compared to conventional light crude oil, bitumen typically contains more sulphur and a much higher proportion of large, carbon-rich hydrocarbon molecules. All operating mines have integral upgraders and 100 per cent of mineable production is upgraded within Alberta. In 2010, about 15.3 per cent of in-situ production was upgraded in Alberta, with most of the rest being upgraded elsewhere in Canada or shipped to the U.S. for upgrading. Currently only a very small portion of bitumen is shipped to Asian markets. Upgrading is the process that converts bitumen into a product with a density and viscosity similar to conventional light crude oil. This is accomplished by using heat to “crack” the big molecules into smaller fragments. Adding high-pressure hydrogen and/or removing carbon can also create smaller hydrocarbon molecules. Most of the energy for upgrading is obtained from byproducts of the process. Upgrading is usually a two-stage process. In the first stage, coking, hydro-processing, or both, are used to break up the molecules. Coking removes carbon, while hydro-processing adds hydrogen. In the second stage, a process called hydrotreating is used to stabilize the products and to remove impurities such as sulphur and nitrogen. The hydrogen used for hydro-processing and hydrotreating is produced from natural gas and steam. If the upgrading process includes coking, the coke is removed from the bitumen and used for industrial applications. Another upgrading process adds hydrogen to the bitumen and breaks up the large hydrocarbon molecules – a process called hydrogen-addition or hydrogen-conversion. Hydrocarbons are stabilized by adding hydrogen in the presence of catalysts. After stabilization, the hydrocarbons are separated into naphtha, kerosene and gas oil. Utilities plants provide steam, nitrogen, oxygen, potable water and electricity. Sulphur can be recovered to be used in fertilizer and other products. A range of products including light sweet and sour crude oils and diesel products are blended and shipped to markets. Upgrading produces various hydrocarbon products that can be blended together into a custom-made crude oil equivalent, or they can be sold or used separately. The Syncrude and Suncor mining projects use some of their production to fuel the diesel engines in trucks and other equipment at their operations. Suncor also ships diesel fuel by pipeline to Edmonton for sale in the marketplace. Upgraders in Canada remove most of the sulphur from bitumen. Since sulphur may be about five per cent of the raw resource, large volumes of this by-product are produced. The Alberta Energy Resources Conservation Board expects annual sulphur production from oil sands projects to rise from about 1.74 million tonnes in 2010 to about 3.07 million tonnes in 2020. Sulphur is used in the manufacture of fertilizers, pharmaceuticals and other products. Unsold sulphur is stockpiled. Those operations that use coking also market or stockpile the coke, which contains some sulphur as well as carbon. 16 CANADA’S OIL SANDS THIRD edition November 2011
Co-generation is the simultaneous production of electricity and heat energy from a single facility. All of the oil sands mining operations, and several of the larger in-situ projects, include natural gas or synthetic gas-fired co-generation. The electricity is used to meet the projects’ own energy needs, such as operating mine machinery and in-situ well pumps, and any excess power is sold to the provincial power grid. The heat energy is used to separate bitumen from sand – whether at the extraction plants in the mining operations or by steam injection at the in-situ projects. Co-generation produces fewer air emissions per unit of energy produced compared to other thermal-electric generating facilities. Upgrading can occur at the producing site, adjacent to a refinery or anywhere in between. The choice of location for upgrading depends on several factors: • Capital and operating costs of the upgrader at one location relative to another • Potential synergies of locating an upgrader near to or in association with other corporate assets such as a refinery • Transportation costs • Diluent cost and availability – crude bitumen has to be diluted to flow through pipelines • Pumping costs – diluted bitumen requires more energy to pump than conventional or upgraded crude • Marketing conditions Photo courtesy of Suncor Energy Inc. Product tanks store refineryready feedstock and diesel fuel that is shipped by pipeline to customers in commercial and industrial markets throughout North America. Transportation Pipelines are the least expensive and most efficient way to move petroleum products over land. Upgraded synthetic crude oil has a density of about 850 kilograms per cubic metre (about 34 degrees on the America Petroleum Institute gravity scale), similar to the vegetable oil in our kitchens, and is shipped through pipelines just like the conventional light crude oil it resembles. Moving bitumen by pipeline is a challenge due to its high viscosity (resistance to flow, or stickiness). Large-diameter pipelines with powerful pumps help, but producers also lower the density and viscosity of the bitumen by diluting it with a light, low-viscosity petroleum product such as condensate, conventional light crude oil or synthetic crude oil. Some bitumen must be diluted by as much as 40 per cent to flow through a pipeline. Photo courtesy of Suncor Energy Inc. Sand is mined using shovels with buckets that hold 100 tonnes, loading 400 tonne trucks. The most common diluent for oil sands bitumen is condensate, a mixture of pentanes and heavier hydrocarbons obtained from natural gas processing. Supplies of condensate in Western Canada are limited. Some pipeline systems already include return lines to carry condensate back upstream for re-use. A recent alternative uses synthetic crude to dilute bitumen for shipment; the two fluids are separated before processing at the downstream end. Other proposed solutions involve pipelining imported condensate from the U.S. Midwest or Canada’s West Coast for use as diluent. As bitumen production has increased, there have been periodic shortages of condensate and light oil available for dilution. This is one reason why upgraders in Western Canada increased their processing capacity. Bitumen can also be shipped by truck, but again it must be diluted or heated first. Trucks are used mainly to carry production from small or experimental operations to the nearest upgrader or pipeline terminal. CANADA’S OIL SANDS THIRD edition November 2011 17
Page 1 and 2: Canada’s Oil Sands Third Edition
Page 3 and 4: Contents Section 1: RESOURCES BEYON
Page 5 and 6: As of July 2011, there were 92 acti
Page 7 and 8: The continental and global context
Page 9 and 10: Challenges The economic, environmen
Page 11 and 12: To this end, the Alberta government
Page 13 and 14: Mining shovels dig into sand and lo
Page 15 and 16: In-situ bitumen More than 80 per ce
Page 17: Firefloods There has been some prod
Page 21 and 22: gross sales revenues on all product
Page 23 and 24: Section 3 Towards Sustainable Devel
Page 25 and 26: light of achieving Alberta’s long
Page 27 and 28: The industry-funded, multi-stakehol
Page 29 and 30: dioxide in areas close to the oil s
Page 31 and 32: oil sands area, and industry has ma
Page 33 and 34: The path ahead North Americans have
Page 35 and 36: Mitchell, Robert; Brad Anderson, Ma
Page 37 and 38: Key definitions Hydrocarbons are co

Canada's Oil Sands - Centre for Energy

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