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Imperial leading way in Canada’s oil upstream By GARY PARK
For Petroleum News
When Imperial Oil decides to become a trailblazer in Canada’s oil upstream, its peers pay close attention.
And pioneering is what the company has in mind for a proposed new 50,000 barrels per day oil sands facility in the Cold Lake region of northeastern Alberta.
It is seeking regulatory permission to turn a pilot operation into a commercial venture, using an adaptation of the steam-assisted gravity drainage technology whose overriding objective is to use less water and energy for the extraction of heavy crude.
The “solvent-assisted” SAGD method is a key element of both Imperial’s amendment to an earlier application for a thermal-recovery operation and the application it has filed for its C$2 billion plant dubbed Midzaghe, an aboriginal word for owl.
Injecting solvents such as butane and propane reduces the need for steam-generated pressure and the need for high temperatures in SAGD extraction, allowing more oil and gas to flow to the surface while lowering energy consumption.
A spokeswoman for Imperial said the updated Aspen project application, the first 45,000 bpd phase of that proposal, has also modified a plan submitted to the Alberta Energy Regulator in late 2013.
Others also testing techniques Other leading oil sands players, Suncor Energy and Cenovus Energy, have also been testing solvent-based techniques for years, chasing the same goals of reducing greenhouse gas emissions and costs.
The pressure on the industry is building as the Alberta government prepares to implement new climate change policies, which will start a year from now with a carbon tax of C$30 per metric ton.
FirstEnergy Capital analyst Michael Dunn said in a research note that Imperial has years of experience using solvents to squeeze more production from its older wells in Cold Lake which occupy the same lease areas as Midzaghe.
He rated Imperial as the “most experienced user of solvents in the bitumen recovery process.”
However, to date no major oil sands producer has taken the step from a pilot project to a full-scale commercial facility that relies on solvents, making Aspen the potential pioneer, followed by Midzaghe.
Imperial, owned almost 70 percent by ExxonMobil, said it could sanction Midzaghe in 2019 if it receives a regulatory green light, with first oil produced in 2022.
Having taken a step-by-step approach to building its Cold Lake complex over the past 30 years, Imperial is now producing about 160,000 bpd at the site.
Imperial has also announced the sale of its 497 Esso-branded gasoline stations across Canada for C$2.8 billion, prompting analysts to suggest the company is building a “war chest” that could be used to acquire struggling oil sands producers.
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