|The ERCB is projecting the production of synthetic crude oil from bitumen to almost triple over the forecast period. Click to enlarge.|
Annual production of non-upgraded bitumen and synthetic crude oil from Alberta’s oil sands will increase almost 2.5 times by 2017 from 2007 levels, according to the just-published report Alberta’s Reserves 2007 and Supply/Demand Outlook 2008-2017 by the province’s Energy Resources Conservation Board (ERCB).
In 2007, Alberta produced 209,900 m3 (1.32 million barrels) per day of bitumen from the oil sands, a 5% increase from 2006. Alberta raw bitumen production is expected to increase to 513,000 m3 (3.2 million barrels) per day by 2017, based on announced expansions of existing projects and new projects.
|Increase in production of synthetic crude oil. Click to enlarge.|
In 2007, 62% of bitumen produced was upgraded in Alberta, yielding 109,300 m3 (687,000 barrels) per day of synthetic crude oil (SCO). Bitumen upgrading is expected to reach 70% by 2017. This will yield 317,800 m3 (2 million barrels) per day.
According to the forecast, Alberta’s export of SCO produced from bitumen will increase from 68,400 m3 (432,000 barrels) per day to 266,000 m3 (1.673 million barrels)—an almost four-fold increase. Export of non-upgraded bitumen will increase from 76,900 m3 (484,000 barrels) to 145,000 m3 (912,000 barrels).
Crude bitumen is a viscous mixture of hydrocarbons that in its natural state does not flow to a well. In Alberta, crude bitumen occurs in sand (clastic) and carbonate formations. The bitumen and the material it is found in are called oil sands. The quality of an oil sands deposit depends primarily on the degree of saturation of bitumen within the reservoir and the thickness of the saturated interval.
Two methods are used for recovery of bitumen, depending on the depth of the deposit. Near-surface deposits of bitumen are mined, while the deeper deposits are recovered in situ by one of three methods: primary production, cyclic steam stimulation (CSS), and steam assisted-gravity drainage (SAGD).
Once produced, the bitumen is either upgraded into synthetic crude oil, or shipped out without upgrading. Upgraders chemically alter the bitumen by adding hydrogen, subtracting carbon, or both.
Most of the upgraders use coking as their primary upgrading technology and achieve volumetric liquid yields (SCO / bitumen feed) of 80 to 90%, while the projects that employ hydro-conversion for primary upgrading can achieve volumetric liquid yields of 100% or more.
Alberta’s current three upgraders produce a variety of synthetic products: Suncor produces light sweet and medium sour crudes plus diesel, Syncrude produces light sweet synthetic crude, and the Shell upgrader produces intermediate refinery feedstock for the Shell Scotford Refinery, as well as sweet and heavy SCO. The ECRB expects production from new upgraders to align in response to specific refinery product requirements.
Demand for Alberta SCO [synthetic crude oil] will come primarily from existing markets vacated by declining light crude supplies, as well as increased markets for the future growth of refined products. The largest export markets for Alberta SCO and non-upgraded bitumen are the US midwest, with a refining capacity of 570,103 m3/d, and the US Rocky Mountain region, with a refining capacity of 95,103 m3/d. The refineries in these areas are capable of absorbing a substantial increase in supplies of SCO and non-upgraded bitumen from Alberta. Other potential market regions could be the US east coast, with a refining capacity of 273,103 m3/d, the US Gulf Coast, with a refining capacity of 1,328,103 m3/d, the US west coast, with a refining capacity of 506,103 m3/d, and Asia.
The ERCB report is an independent, annual source of information on the state of reserves and the supply and demand for Alberta’s diverse energy resources: crude bitumen, crude oil, natural gas, natural gas liquids, coal, and sulphur. The report also notes:
In 2007, raw bitumen production surpassed conventional oil production by over 250%. Bitumen production of 482 million barrels averaged 1.32 million barrels per day (an increase of 5% over 2006), compared to conventional oil production of 191 million barrels, or 524,800 barrels per day (a decrease of 3.5% from 2006).
Alberta’s total remaining established bitumen and conventional oil reserves totaled 174.2 billion barrels, consisting of bitumen (172.7 billion barrels) and conventional oil (1.5 billion barrels). About 82% of the total remaining established bitumen reserves is considered recoverable by in situ methods, and 18% by surface mining methods.
The ERCB is basing its analysis on the expectation that the crude oil price in North America, measured by West Texas Intermediate (WTI) crude oil, will continue to be volatile, averaging US$105 per barrel in 2008 and rising steadily to an average of US$138 per barrel by 2017.