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  • Canadian Heavy Oil Association

    Upgrading Bitumen Derived Feedstocks - Choices and OpportunitiesChoices and Opportunities

    Presented to:

    Canadian Crude Quality Technical Association (CCQTA)

    Crude Oil Quality Group (COQG) Joint Meeting

    Calgary, June 24, 2008

    Canadian Heavy Oil Association

    Presented by: Gerald W. Bruce , Technical Director CHOA

  • Outline

    • Heavy oil development in Alberta, CanadaHeavy oil development in Alberta, Canada – Growth and development plans

    • Bitumen Upgrading – More than just delayed cokingj y g

    • The Future revealedThe Future revealed

    Canadian Heavy Oil Association

  • Where Heavy Oil Livesy

    • Conventional heavy oil in y the LLoydminster area – Cold production (CHOP)

    • With/without sand• With/without sand

    • Mining near Fort McMurray – Athabasca river area

    • Thermal production Steam assisted gravity– Steam assisted gravity drainage (SAGD)

    – Cyclical Steam Stimulation (CSS)

    Canadian Heavy Oil Association

    (CSS)

  • Mining vs Thermal Productiong

    • In-situ thermal methods are used to access “deep” bitumen

    Canadian Heavy Oil Association

    bitumen

  • Bitumen Driven

    • 12% oil in the “oil sands”• 12% oil in the oil sands – Mining or in-situ thermal production

    • Oil is referred to as bitumen ff

    Canadian Heavy Oil Association

    – Heavy, sour, poor quality, difficult to deal with

  • Bitumen is a Difficult Feedstock

    Bitumen Bitumen Derived

    M Bit d i d f d t k diff t th M di S t C d

    Canadian Heavy Oil Association

    Message: Bitumen derived feedstocks are very different than Medium Sweet Crude

  • Alberta Production Growth

    4.5 million pe r d

    ay

    barrels/day

    3 5 millionBitumen Blendso f b

    ar re

    ls

    3.5 million Oil Sands Derived

    Synthetic Crude

    ho us

    an ds

    o Th

    Canadian Heavy Oil Association

    Source: CAPP – June 2008 (moderate case)

  • Investment

    • Bitumen production – Mining and extraction – Thermal bitumen production

    • Steam assisted gravity drainage (SAGD) • Cyclical steam stimulation (CSS)

    • Upgrading/refining – Either linked with production or “stand alone”

    • Field location vs central – Fort McMurray vs Edmonton

    • Pipelines – Including condensate import/return

    Canadian Heavy Oil Association

  • Planned Alberta Investment

    Oil Sands > $C162 billion

    TOTAL $C2 4 billi

    Canadian Heavy Oil Association

    >$C254 billion Source: Alberta Finance and Enterprise – March 2008 Update

  • Projects Backing Upj g p

    •May 2008 update 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

    •Construction craft personnel forecast

    Canadian Heavy Oil Association

    Source: COAA

  • Investment Commentaryy

    • Many projects are “on the books”Many projects are on the books

    • There are many projects “clustered” in the same schedulesame schedule

    • Realities : – workforce, construction, equipment, and

    infrastructure

    S h d l ill t d• Schedules will extend

    Canadian Heavy Oil Association

  • Upgrading Bitumen

    Canadian Heavy Oil Association

  • Where to Start Upgrading?pg g

    Canadian Heavy Oil Association

  • Upgrading Perspectivepg g p

    • Starts at the mine with extraction – Froth treatment

    • Can be done in the field with thermal production – Make your own fuel, get rid of diluent

    • Can be a purpose built upgrader making SCO – Syncrude, Suncor for exampleSyncrude, Suncor for example

    • Can be “linked” to refining

    Canadian Heavy Oil Association

  • New Words – DILBIT and SYNBIT

    Bitumen Production Upgrading Refining

    Light Crude Refinery

    Bitumen Upgrading

    (Carbon OUT or H 2 IN)

    Light SCO Product

    (Carbon OUT or H 2 IN)

    Bitumen P d ti

    Heavy SCO Product

    SYNBIT Product Medium Crude

    Refinery

    Production

    (Mining or In-Situ)

    SYNBIT Product

    Heavy Crude Refinery

    DILBIT Product

    Canadian Heavy Oil Association

    Naphtha Diluent

  • Alberta Upgrading Planspg g

    • Existing capacity and planned capacity additionsg p y p p y

    • 16 companies with multi-phase upgrading plansp p pg g p – 48 distinct project “phases”

    • Range of facility configurations

    • Values change “monthly”, but only seem to go in one direction (up).

    Canadian Heavy Oil Association

  • Upgrading in Albertapg g

    1 600

    1,200

    1,400

    1,600

    en

    600

    800

    1,000

    B PD

    b itu

    m e

    -

    200

    400

    kB

    Operating Construction Approved Application Announced

    TOTAL Upgrading = 4.7 million BPD

    Canadian Heavy Oil Association

    April 2008 data – Strategy West pg g

  • Operatingp g

    800

    1000

    n

    400

    600

    bp d

    B itu

    m e

    Syncrude

    Suncor

    Shell Scotford

    0

    200

    k

    1Operating Plants

    Note: Excludes Canadian refineries with

    Canadian Heavy Oil Association

    Upgrading (Petro-Canada, Imperial, Husky)

  • Construction

    400 450 500

    200 250 300 350

    PD b

    itu m

    en Shell Scotford expansion BA Energy (1)

    Suncor Millenium Coker

    CNRL Horizon (1)

    50 100 150 200

    k B

    P CNRL Horizon (1) Opti-Nexen (1)

    0 1

    Canadian Heavy Oil Association

  • Approvedpp

    600

    700

    800

    n

    Suncor Voyageur(1,2)

    Opti-Nexen (2)

    400

    500

    600

    D bi

    tu m

    en

    Opti-Nexen (2)

    CNRL Horizon (2,3)

    100

    200

    300

    k BP North West Upgrading

    (1,2,3) BA Energy (2,3)

    0 1

    Canadian Heavy Oil Association

  • Applicationpp

    1200

    1400

    1600

    n

    Value Creation (pilot)

    Total (1,2)

    800

    1000

    1200

    D bi

    tu m

    en

    Shell Scotford 2 (1-4)

    S (1 2)

    200

    400

    600

    k BP

    D Synenco (1,2)

    StatOil Hydro (1,2)

    0 1

    Petro-Canada Fort Hills(1,2,3)

    Canadian Heavy Oil Association

  • Announced

    1000

    1200

    1400

    n

    Value Creation (3,4)

    600

    800

    1000

    P D

    bi tu

    m e Syncrude (3,4)

    Opti-Nexen (3,4,5,6) CNRL Horizon (4,5) CNRL P i (1 2)

    0

    200

    400k B CNRL Primrose (1,2)

    BlueSky Refining (1,2,3,4)

    0 1

    Canadian Heavy Oil Association

  • Alberta Industrial Heartland

    Canadian Heavy Oil Association

  • Alberta Industrial Heartland

    Canadian Heavy Oil Association Source: AIHA

  • Upgrading Developmentpg g p

    • At/near production siteAt/near production site – Syncrude, Suncor, CNRL, Opti/Nexen, Value

    Creation

    • Edmonton Region – Merchant Upgrading

    • North West Upgrading • BA EnergyBA Energy

    – Shell, Petro-Canada, StatOil Hydro, Total, Synenco, others

    Canadian Heavy Oil Association

  • The Future (revealed)( )

    • There will be significant volumes of bitumen derived g feedstocks in the market place – Bitumen blends

    Synthetic Crude Oil (variety of qualities)– Synthetic Crude Oil (variety of qualities) – Finished products

    • Encouragement to add value to bitumen in Alberta – Global marketplace

    • Environmental responsibility – Emissions managed and by-products eliminated

    Canadian Heavy Oil Association

  • Opportunities pp

    • Application of innovative technology P d i di d fi i– Production, upgrading and refining

    • Anticipating environmental compliance

    Canadian Heavy Oil Association