Fallen oil prices light fire under trials of hot production method
“Thin layers of success eventually build up to a deep luster. And that’s what we want,” Bloomer says.
After solving early problems of fine sand plugging up the system, THAI is becoming reliable. In the latest advance, using a catalyst embedded in double-walled pipe, the quality of the product is improving.
On an industry scale known as degrees API, Bloomer reports the Whitesands flows register 12.3 as opposed to the 7.9 scored by the initial bitumen output of standard “in-situ” or underground production methods. The higher the number, the lighter and more desirable the oil. The difference is not subtle. Raw 7.9 API bitumen sinks in water. The 12.3 API stuff floats.
“We produce an upgraded oil,” Bloomer says. “This is the holy grail. It’s what everybody would love to do.”
The next THAI step is to go higher up the quality scale. By using an allied technology branded CAPRI, Petrobank sees the potential to climb into a 24-25 API range – without having to build one of the upgrader plants that are the costliest, most complicated parts of oil sands complexes using older methods.
To the extent that it works, the process will increase revenues too. Raw oil sands bitumen fetches only about half the price of the refinery-ready West Texas Intermediate, Brent and Edmonton Par benchmark grades. By improving quality enough for THAI output to flow in pipelines, without adding expensive light oil or liquid byproducts of natural gas known as “diluents,” Bloomer estimates sales prices could be increased by about one-third compared to ordinary bitumen.
As bonuses, he reports THAI can about double output to 70-80 per cent of deposits. The process skips burning costly natural gas to make the steam used in other heat injection systems. Water use is reduced. Oil sands carbon dioxide emissions are potentially cut in half.
“This technology touches every aspect of the business,” Bloomer says. Despite crumbling stock, credit and oil markets, Petrobank kept working on applications for additional production permits in the Fort McMurray region.
“We’ve had issues. We redesigned our facilities. We were told we’d never build a pilot, that we’d never start it up, that we wouldn’t be able to start combustion, that we wouldn’t get good productivity. All of those things we’ve done,” Bloomer says.
While not yet setting the oil world aflame, Petrobank is beginning to make converts willing to try barbecued bitumen production. Duvernay Petroleum, before its $5.9-billion takeover by Shell Canada, signed a contract to use THAI on a Peace River heavy oil formation. As oil prices melted down, True Energy Trust made a deal to try fire on its Kerrobert deposit in Saskatchewan near the Alberta boundary south of Lloydminster.
Fort McMurray oil sands developers, including users of the currently favored steam-assisted gravity drainage (SAGD) method, are watching Petrobank. “THAI is where SAGD was 15 years ago – in the testing phase,” OPTI Canada president Sid Dykstra said as its Long Lake oil sands partnership with Nexen Inc. steamed into production.
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