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Canada’s Oil Sands Overview and Bitumen Blending Primer

US National Academy of Science October 23, 2012

Global Crude Oil Reserves by Country

25 21 203037

4760

92102

143151

174

211

265

0

50

100

150

200

250

300

Saud

i Ara

bia

Vene

zuela

Cana

da Iran

Iraq

Kuwait

Abu D

habi

Russ

iaLib

ya

Nigeria

Kazh

akhs

tanQata

r

United

Stat

esCh

ina

billi

on b

arre

ls

Source: Oil & Gas Journal Dec. 2011

Restricted (80%)

Open to Private Sector

Oil Sands 55%

Other 45%

World Oil Reserves Open  to    

Private  Sector  

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Canada’s Oil Sands

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Oil Sands Projects in Three Deposits

Peace River

Athabasca

Cold Lake

Edmonton

Calgary

Ft. McMurray Fort

McMurray

Cold Lake

Fort Hills

Horizon

Joslyn Creek

Syncrude

Suncor

Dover

MacKay River

Firebag

Hangingstone

Long Lake

Surmont

Foster Creek

Wolf Lake/Primrose

Tucker Lake

Jackfish

Kearl Lake

Jackpine

•  Oil sands production now exceeds 1.6 million barrels per day

•  $123 billion

built from 1997-2010

Peace River

Peace River

Seal

Northern Lights

White Sands

In Situ Projects Mining Projects

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Land Use and Reclamation

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Canadian Oil Sands (Bitumen and SCO) & Conventional Production Forecast

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Oil Sands production technologies

Source: Canadian Centre for Energy Information

Steam Assisted Gravity Drainage (SAGD)

In-situ operations: • Do not have mines • Or tailings ponds

Mining – 35 billion barrels reserves 20% of the oil sands reserves is less than 200 feet deep

In-Situ – 135 billion barrels reserves 80% of the oil sands reserves is more than 200 feet deep

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Oil Sands - In Situ

● 80% of reserves produced using in-situ recovery technology

● Too deep to mine ● Technologies:

•  Cyclic steam •  Steam Assisted Gravity

Drainage (SAGD)

Oil Production  

SAGD Process  

Steam Injection  

Reservoir  Oil Production  

Steam Chamber

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In Situ Oil Sands Recovery Steam Assisted Gravity Drainage (SAGD)

Source: DeerCreek

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Cold Lake Cyclic Steam Stimulation (CSS)

Steam and condensed water heat the viscous oil

Steam injected into the reservoir

Heated oil and water are pumped to the surface

Stage 1 Steam Injection

Stage 2 Soak Phase

Stage 3 Production

Courtesy Imperial Oil

Mined vs SAGD Growth

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Mined Bitumen production :

• Historically integrated with Alberta Upgraders to produce synthetic crude oils thus this bitumen does not planfully leave the province.

• Future Mined production designs incorporate a process called Paraffinic Froth Treatment (PFT) which yields a bitumen (and subsequent dilbit/synbit blend) of improved coker yield value for Refiners/Upgraders as well as maintaining required Pipeline specifications. This will have some portion leaving the provincial upgrading network.

SAGD Bitumen Production :

• Upgrader feed as well as going to Refinery markets as dilbits/synbits

• high volumetric growth commodity ex Alberta for bitumen blends

Million  

bpd  

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2011 2030

Mined

Insitu

Dilbit vs Synbit

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Raw Bitumen has a density of 960-1020 kg/m3. To meet Pipelines specifications for viscosity and density, and to meet Refinery desired heavy crude yields/qualities, a controlled blend with a diluent is produced.

Diluents fall into two categories in general

1) naphtha based diluents – used to produce a DILBIT •  650-750 kg/m3 typical density for diluent

•  natural liquids, ultra light sweet crudes, imported condensates, US and Cdn Refinery components

•  nominal 30% diluent required with 70% Bitumen

2) sweet synthetic crude oils (SCO) – used to produce a SYNBIT

•  840-870 kg/m3 typical density for SCO

•  same as existing SCO from Alberta upgraders to Refiners for 20+ years; residue free, hydrotreated, low sulfur

•  nominal 50% Synthetic crude required with 50% Bitumen

•  higher refinery value than dilbit (improved yield/value)

Generallly, the market diluent pricing, access to logistics, production technologies, and Producer/Refiner economics dictate a bitumen produced as a dilbit or synbit.

Bitumen Crude Blends

●  Heavy Crudes vary blend quality somewhat with seasonal temperature (for bitumen based and conventional heavies).

●  Pipeline designs are for 350 cSt viscosity maximum crude and 940 kg/m3 density (one is constraining).

●  Bitumen remains constant, with the diluent ratio changing. ●  Viscosity limit of 350 cSt is at pipeline reference temperature

§  7.5 - 18.5 deg C = 45.5 - 65.3 deg F §  Changes on planned schedule from winter to summer in 2 week increments

●  Density maximums of 940 are approached in the summer and may become the limiting blend constraint for producers then

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Blend Component

Volume (m3)

Density (kg/m³) vol frac wt frac Mass (kg)

Viscosity (cSt @ 15 C)

Bitumen Heavy 7500 1.0100 51.7% 55.6% 7575 760,000 SCO Diluent 7003 0.8650 48.3% 44.4% 6058 5.85

Synbit Total 14503 0.9400 100.0% 100.0% 13633 128

ComponentVolume

(m3)Density (kg/m³) vol frac wt frac Mass (kg)

Viscosity (cSt @ 15 C)

Bitumen Heavy 7500 1.0100 74.6% 80.5% 7575 760,000 "CRW" Diluent 2554 0.7200 25.4% 19.5% 1839 0.63

Dilbit Total 10054 0.9363 100.0% 100.0% 9414 350

Simple  blend  example  for  a  dilbit  and  synbit  

Bitumen Crude Blends

●  Currently there are many Diluted bitumen crudes in the market

●  Some produced for 10+ years (CL); many new ones in last 5 years

●  Fewer Synbits in the market (due to more costly diluent) ●  CrudeMonitor.ca is a public service providing generic crude

quality data for these blends, as well as providing a list of blend names §  This program is not exhaustive for all pipelines crudes but is

representative of all commodity classes including dilbits and synbits

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Crudemonitor.ca

Typical  density  varia3on  targe5ng  constant  350  cSt  at  Ref  Temp  (CL  shown)  

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Sweet Synthetic primer

SYN and OSA – legacy known sweet synthetics (20+ years)

new entries into commodity class adding refinery optimization potential for yield

Specifications of quality

generally tightly controlled Residue free (no vacuum

bottoms yield)

generic sweet synthetic yields

5

15

25

35

45

55

65

PSC SPX CNS PAS OSA SYN HSB SSX

wt%

= %

off

NaphthaKeroGasoil

Long Lake Light Synthetic

Shell Premium Synthetic

CNRL Light Sweet Synthetic

Premium Albian Synthetic

Suncor Synthetic A

Syncrude Synthetic

Husky Synthetic Blend

Shell Synthetic Light

(PSC) (SPX) (CNS) (PAS) (OSA) (SYN) (HSB) (SSX)Density (kg/m 3 ) 843.0 ± 17.6 862.4 850.7 ± 1.8 860.5 ± 3.1 860.3 ± 5.8 862.5 ± 5.7 863.9 ± 2.6 863.6 ± 4.0

Gravity ( o API) 36.3 ± 3.5 32.4 34.7 ± 0.3 32.8 ± 0.6 32.8 ± 1.1 32.4 ± 1.1 32.1 ± 0.5 32.2 ± 0.8

Sulphur (wt%) 0.08 ± 0.04 0.04 0.08 ± 0.01 0.05 ± 0.01 0.17 ± 0.02 0.18 ± 0.02 0.10 ± 0.02 0.11 ± 0.04

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2011 Canada and U.S. Demand for Crude Oil by Source Thousand Barrels per Day

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Access to Markets is Essential

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