A $30-million, eight-year project to tap Alberta’s heavy oil — using the gas that fuels summer barbecues — promises to slash Canada’s greenhouse gas emissions.
The pilot project, led by Northstar Energy Corp., will involve injecting propane into deep reservoirs of tar-like bitumen in the oilsands near Fort McMurray.
“We’re going to use propane instead of steam to try and get the tar to melt,” says John Pearce, Northstar’s manager of heavy oil.
The new reservoir-recovery technology, called vapor extraction or VAPEX, is supported by several years of laboratory-scale testing.
|Mike Sturk, Business Edge|
|Senator Tommy Bnaks, left, and Northstar president and CEO John Richels discuss the company's new technology last week.|
If it works, the propane solvent will dissolve in the bitumen, dilute the thick deposit, and allow heavy oil to drain by gravity into production wells where it can be pumped to the surface.
VAPEX would make extracting heavy oil cheaper. It would reduce the need to build and operate natural gas-fired thermal plants and associated infrastructure to make and pump steam into the reservoirs. And it would eliminate the need for vast quantities of water.
“Somehow, some way, we’re going to find a cheaper way to get this bitumen out of the ground,” Pearce says.
Production from existing and future oilsands facilities is projected to reach 250,000 barrels a day by 2015. If VAPEX extraction was in wide use by then, it would significantly reduce the industry’s emissions of carbon dioxide and other greenhouse gases blamed for global warming.
With VAPEX, “we’re talking about 85-per-cent less greenhouse gases on a barrel-for-barrel basis” of heavy oil produced, Pearce says.
That is sufficient to meet up to eight per cent of the emission-reduction target Canada agreed to under the Kyoto international climate change treaty, he says.
The new technology could also be used to recover heavy oil from different types of reservoirs where the existing steam-assisted gravity drainage method isn’t suitable, Pearce adds. VAPEX has the potential to double Alberta’s known oilsands reserves, he says.
The technology’s promise has attracted $7.5 million in investment from the Alberta government and an equal amount from the federal Technology Partnerships Canada program.
“This investment clearly demonstrates the Government of Canada’s firm commitment to the development of this vital resource in an environmentally effective manner,” Senator Tommy Banks said.
Northstar and its partners at its Dover oilsands test site north of Fort McMurray are contributing $7.5 million to the pilot project. The partners are Imperial Oil, Petro-Canada, Chevron Canada and Gibson Petroleum.
A separate group of companies that wants access to the project data is kicking in at least another $7.5 million.
The project includes the drilling two horizontal well pairs, four observation wells and pilot-scale surface equipment to separate the dissolved propane from the produced oil.
The wells are scheduled to be drilled in September.
The oil and gas business increasingly involves the use of high technology, Pearce says. “When we’re drilling in the foothills, when we’re going after coal-bed methane, when we’re doing heavy oil recovery . . . you have to fundamentally internalize that type of technology to be successful.”