Saturday, February 21, 2009

New Syngas Method for Lower Tar Sand Production Costs

Canada holds vast hydrocarbon potential, but getting it isn't cheap. Oil companies are pouring fortunes into research in effort to lower production costs from roughly $10 a barrel. Some analysts believe it could potentially fall to $3 a barrel (Ghawar Guzzler cannot officiate this for now).

Nexen Inc. and OPTI has a promising new technique. Rather than piping in vast amounts of natural gas to heat water into steam - thus adding to the cost - a partial offset is created by using syngas, processed from the tar sands itself is used.

The Calgary Herald reports:

Nexen Inc. and OPTI Canada’s $6.1-billion technological gamble appears to be paying off as first production of sweet synthetic crude flowed from the partners’ Long Lake oilsands facility this week.

After more than a year in delays, the innovative thermal bitumen operation and upgrading unit ran as planned, on synthetic gas processed from the heaviest bits of the tar-like substance. Full production of 60,000 barrels per day isn’t expected for another year to 18 months, but analysts called the 24-hour run an important catalyst for the project.


Thermal oilsands projects use a massive amount of natural gas to generate steam, which is piped into the earth to soften up bitumen and enable it to flow through secondary wells back up to the surface.

The technology being pioneered at Long Lake would reduce the need to buy the fuel by running somewhat of a closed loop system.

Briefly, bitumen is steamed out of the earth, then processed to separate out the sand and water, as other steam assisted gravity drainage projects, then the water gets recycled back into steam.

Where Long Lake gets interesting is that the diluted bitumen then gets partially upgraded, and those products get further upgraded through a hydrocracker into light synthetic crude with low sulphur content, with the asphalt-like bits turned into synthetic gas. The gas is subsequently burned to produce the steam to produce the bitumen, and as a source of hydrogen for the hydrocracker that produces the synthetic crude.

- Brewskie

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