EOR PROJECT IN ALBERTA APPROVED FOR PHASE I CONSTRUCTION

Lindsay Kalter
GHG Monitor
12/7/12

An enhanced oil recovery project in the Canadian province of Alberta has just been given the green light to begin the first phase of construction. The North West Redwater Partnership’s Sturgeon Refinery, slated for Alberta’s Industrial Heartland northeast of Edmonton, will take in about 50,000 barrels of raw bitumen per day from the province’s oil sands for conversion to other fuels and capture 1.2 million tons of carbon dioxide to be sold for EOR purposes. The project is a joint venture between North West Upgrading, Inc., and Canadian Natural Resources Limited. “We’re off and running and completing our financing,” Terry Kemp, vice president of marketing and business development for North West Upgrading, told GHG Monitor this week. “We now will be moving into the full project execution stage, which is to complete detailed engineering and start construction.”

This officially marks the beginning of the three-phase project, the first phase of which will cost roughly $5.7 billion and will be completed over the course of three years. According to Kemp, civil work will begin this summer, and the bulk of heavy construction will occur in 2014 and 2015. The facility is set to go online by mid-2016. Once the CO2 is being captured, Kemp said, it will be shipped down the proposed Enhance Energy’s Alberta Carbon Trunk Line for EOR operations in older oilfields in central Alberta.

There were eight similar projects planned for the Heartland area between 2004 and 2008, but all failed due to the recession, according to Kemp. The Sturgeon Refinery project initially began in 2004, but Kemp said the economic downturn forced managers to pull back in 2008. The project gained new traction after the Alberta government partnership was formed, Kemp said, though he would not specify how much the project will receive in government funding. Those figures will be released during the first quarter of next year, he said. The Alberta government will supply 75 percent of the bitumen to the refinery to support the province’s oil sands processing industry.

Project Parallels Shell’s EOR-ready Quest Facility

Shell Canada got the go-ahead to start construction in September for a somewhat similar endeavor. The oil giant’s Quest carbon capture and storage project will capture 1 million tons of CO2 annually from its retrofitted Scotford oil sands upgrader also located in Alberta’s Industrial Heartland. Though the CO2 is slated for injection into a deep saline aquifer, Shell has not ruled out the possibility of EOR. One of Shell’s project leads for Quest, Len Heckel, told GHG Monitor in September that EOR capabilities for the project were being secured to keep options open for the future. “The EOR option is something that we’ve always been looking at, and it’s built into our design that we can, with the right commercial arrangement, look at selling our CO2 to a third party,” Heckel said at the time.

While both projects are bitumen processing facilities and are receiving funding from the Alberta government, Kemp said one main difference lies in the CO2 capture process. “Shell is taking CO2 off the back end of the reformer. We’re taking CO2 from a gasification process,” he said. Construction at Quest has already begun and is set to be completed by 2014. The project is expected to be fully operational in 2015 and will utilize a methyl diethanolamine-based (MDEA) amine capture technology developed by Shell called ADIP-X to separate the CO2 from the main gas stream.