The Long Lake Project - The First Field Integration of SAGD and Upgrading

Abstract

Abstract The OPTI Canada Inc. (OPTI) / Nexen Inc. (Nexen) Long Lake integrated bitumen recovery and upgrading project is a unique solution to the three key problems associated with the development of thermally produced extra heavy oil resources: the low value of the produced oil, the high fuel cost associated with thermal production, and the need for diluents to transport the produced oil to markets. The Long Lake Project will produce a premium light sweet synthetic crude from steam assisted gravity drainage (SAGD) produced Athabasca bitumen, utilizing upgrader bottoms as the primary source for upgrader hydrogen and SAGD fuel. The core of the Long Lake integrated upgrader is the patented OrCrude™ upgrading process that uses distillation, solvent deasphalting, and thermal cracking in a unique combination to partially upgrade bitumen into OrCrude product and produce an asphaltene by-product. At the Long Lake Project the OrCrude process will be integrated with commercially proven technologies to hydrocrack the partially upgraded OrCrude product to premium synthetic crude. In addition, the asphaltenes will be fed to an asphaltene gasification system to produce hydrogen for the hydrocracker and syngas fuel for the SAGD process. The result is an integrated project that will produce premium synthetic crude with quality characteristics that are superior to other synthetics, at an operating cost that is less than any other Canadian production and upgrading project. The capital cost for the integrated Long Lake Project is forecasted to be comparable to other integrated Athabasca bitumen and upgrading projects. The OrCrude process has been demonstrated at a 500 bpsd commercial demonstration facility near Cold Lake, Alberta which has been operating since mid-2001 on Cold Lake and Athabasca bitumens. The Long Lake Project, currently in the regulatory review process, is proposed to have an initial size of 70,000 bpsd of SAGD production and 70,000 bpsd of upgrading. OPTI and Nexen have plans to subsequently expand the upgrader to 140,000 bpsd. Construction is planned to commence in late 2003 with production in 2006. Background Scope. Conventional oil production in the mature Western Canadian Sedimentary Basin has limited opportunities for growth. Therefore, several companies are pursuing bitumen resource development projects for growth of their Canadian oil portfolios. The Athabasca Oil Sands are the center of this focus as one of the largest and highest-quality oil sands resources in the world. Steam assisted gravity drainage (SAGD) is now considered commercially proven and the leading process to recover bitumen resources that are not amenable to surface mining. Several producers have active or proposed commercial projects using SAGD technology for bitumen recovery. Bitumen and heavy oil production are forecast to increase rapidly in the coming decade. Both products require the addition of a light diluent to reduce viscosity and density for unheated pipeline transportation. The markets for diluted bitumen and heavy oil are projected to become more saturated due to limited refining capacity to process extra-heavy crudes. As a result of potential diluent shortages, diluent price premiums, variability in heavy-to-light oil price differentials, and uncertainty over oil and natural gas fuel prices, bitumen netbacks are projected to be both depressed and subject to volatility. The bitumen netback is improved and the netback volatility is reduced by upgrading bitumen - a path chosen by OPTI and Nexen. OPTI and Nexen decided to integrate upgrading and SAGD at a field site and to produce fully upgraded synthetic crude oil (SCO) rather than a partially upgraded product. Partially upgraded SCO has market and netback limitations that can increase risks. Secondary upgrading to produce a high quality SCO was found to be good incremental investment and to increase synergies of integrated field upgrading. Scope. Conventional oil production in the mature Western Canadian Sedimentary Basin has limited opportunities for growth. Therefore, several companies are pursuing bitumen resource development projects for growth of their Canadian oil portfolios. The Athabasca Oil Sands are the center of this focus as one of the largest and highest-quality oil sands resources in the world. Steam assisted gravity drainage (SAGD) is now considered commercially proven and the leading process to recover bitumen resources that are not amenable to surface mining. Several producers have active or proposed commercial projects using SAGD technology for bitumen recovery. Bitumen and heavy oil production are forecast to increase rapidly in the coming decade. Both products require the addition of a light diluent to reduce viscosity and density for unheated pipeline transportation. The markets for diluted bitumen and heavy oil are projected to become more saturated due to limited refining capacity to process extra-heavy crudes. As a result of potential diluent shortages, diluent price premiums, variability in heavy-to-light oil price differentials, and uncertainty over oil and natural gas fuel prices, bitumen netbacks are projected to be both depressed and subject to volatility. The bitumen netback is improved and the netback volatility is reduced by upgrading bitumen - a path chosen by OPTI and Nexen. OPTI and Nexen decided to integrate upgrading and SAGD at a field site and to produce fully upgraded synthetic crude oil (SCO) rather than a partially upgraded product. Partially upgraded SCO has market and netback limitations that can increase risks. Secondary upgrading to produce a high quality SCO was found to be good incremental investment and to increase synergies of integrated field upgrading.