Meeting Archives

We hope this helps you understand your audience a bit better and why we asked you to participate in the meeting. If you have any questions feel free to contact Bill Lywood, he has been involved in facilitating the COQA Subcommittee sessions and can provide greater detail on these issues.

 Sincerely,
Ron Fisher, BP, Subcommittee Co-Chair
Harry Giles, COQA Director

For this special meeting, seven Canadian industry representatives made presentations on supply, transportation, and quality of Canadian oil destined for U.S. markets.

·         Canada’s Crude Oil Outlook.  Barry Lynch, Manager, Oil Markets & Pipelines, Canadian Association of Petroleum Producers (CAPP).  In opening his presentation, Mr. Lynch presented an overview of CAPP and how Canadian reserves rank with other leading countries.  Canada has proven reserves second only to Saudi Arabia.  By 2015, it is expected that oil sands growth will move Canada from #7 to #4 in terms of production.  He then reviewed Alberta’s oil reserves and their projected supply and forecast deliveries to various U.S. PADDs.  Next, Mr. Lynch discussed the numerous oil pipeline expansion projects underway and other proposals for delivering Canadian production to domestic markets and those in the U.S. and Asia.  In summary, about 1.1 million b/d of pipeline capacity is being added from Western Canada through 2010.  Currently approved/in construction projects are expected to be sufficient until 2013, after which additional pipeline capacity will be needed.

 

·         Crude Grades and Grade Management Policies/Procedures.  Shaun Serediak, Sr. Quality Analyst, Petroleum Quality, Enbridge Pipelines.  Enbridge transports numerous crude oil streams that are classed into nine broad types.  These include “heavy”, “medium”, “sour”, “sweet”, ”synthetic”, condensate”, and “olefinic.”  Quality of delivered crude is managed in several ways in both pipelines and in tanks depending on numerous controlling factors.  Mr. Serediak presented a matrix of the process involving seven basic strategies for managing quality throughout their system.  Special procedures are required to manage downstream facility sensitivities to mitigate impact of cracked stocks and high TAN streams.  A metrics program is in place to measure and improve quality during transport.

 

·         Canadian Heavy Oil Opportunities and Challenges.  Gerry Belyk, Past president, Canadian Heavy Oil Association (CHOA).  Alberta’s crude oil reserves are second only to those of Saudi Arabia.  But much of these are in oil sands and are heavy and highly viscous and must be heated or diluted to be pumpable.  This bitumen comprises only 10 – 12 mass % of the sands.  Twenty % of the sands are shallow enough that they can be recovered by open pit mining.  A number of proven and experimental or developmental technologies are used for the deeper deposits.  Among these are “cold production with sand (CHOPS)”, cyclic steam stimulation (CSS)”, “steam assisted gravity drainage (SAGD)”, and toe-to-head air injection (THAI).”  Production of oil sands-derived streams is forecast to grow to 3.5 million b/d by 2020.  Investment in projects related to Alberta’s oil sands comprises 2/3 of the total provincial budget through 2020.  This gives rise to good and bad news, and opportunities and challenges for the oil sands industry and for Alberta as discussed by Mr. Belyk in his presentation.

 

·         Quality Guidelines for Western Canadian Condensate.  Randy Segato, Crude Quality Specialist, Suncor Energy, and Chair, CAPP Crude Oil Quality Committee.  Enbridge Pipeline manages a condensate stream referred to as “CRW.”  This consists of supply from several sources in the Western Canadian Sedimentary Basin (WCSB) including field condensates, ultra light sweet crudes, and refinery and upgrader naphtha streams.  Today, this commodity is primarily used as a diluent for Canadian Heavy Crude.  Forecast supply of condensate produced in the WCSB to 2015 is insufficient to meet what is needed for growth in heavy crude and bitumen blend production.  To meet growing demand, Enbridge is planning to construct the Southern Lights diluents pipeline from Chicago to Alberta.  With increased demand for diluents supply in existing and new crude, CAPP initiated work to establish a reference document suitable for evaluating proposals for new components of the CRW pool that will allow full compatibility with streams currently delivered into the pool.  All proposals for the addition of a new component to the CRW stream must meet specifications to ensure that the characteristics of the CRW pool will continue.

 

·         Heavy Oil and Bitumen Analytical Methods:  Understanding Their Capabilities and Limitations.  Dr. Bryan Fuhr, Alberta Research Council.  Many of the analytical methods used for petroleum were developed for light crude oils and are not easily applied to heavy oils and bitumen.  Over the last 30 years experienced users have developed special handling techniques and modifications for application to bitumen.  A considerable data base related to heavy oil methods has been collected in terms of reviews and round robin studies.  Within the CCQTA, there is an ongoing project supporting development of a Heavy Oil Manual.  This “Manual” will document the capabilities and limitations of heavy oil and bitumen methods to allow users to make informed decisions on method selection.  The targeted methods in the “Manual” include:  Sample Preparation; Asphaltenes; TAN; Density; Viscosity; Chlorides (both inorganic and organic): Distillation; Sulfur; and Sediment & Water.  In discussing each of these, Dr. Fuhr described the importance of each parameter, existing test methods, and some of the problems that may be encountered when using these for heavy oils and bitumen.  Future areas of consideration for inclusion in the “Manual” will include:  Carbon, hydrogen, nitrogen, and oxygen; Molecular weight; Carbon residue; Ash; Nickel and vanadium; Flash point; and Pour point.

 

·         Upgrading Bitumen Derived Feedstocks – Choices and Opportunities.  Gerald W. Bruce, Technical Director, CHOA.  In his presentation, Mr. Bruce provided an overview of heavy oil development in Alberta, bitumen upgrading technologies, and a prediction of what the future holds.  By 2020, bitumen blends and synthetic crudes will comprise >75% of the petroleum produced in Alberta.  Considerable investment is being made in projects related to bitumen production technology, upgrading and refining processes, and transportation.  Many of these projects are “clustered” and completion may be impacted by the realities of workforce, construction, equipment, and infrastructure forcing schedules to be extended.  In Alberta, a total of 4.7 million B/D of upgrading projects are either operating, under construction, approved, under application, or announced.  In the not too distant future, there will be significant additional volumes of bitumen derived feedstocks in the market place.  These will consist of bitumen blends, synthetic crude oil, and finished products.  Adding value to bitumen within the province is strongly encouraged, as is managing emissions and eliminating unwanted by-products.  These will provide many opportunities for application of innovative technology in production, upgrading, and refining.

 

·         Market Development for Western Canadian Crude Oil.  Steve Fekete, Senior Principal, Purvin & Gertz.  Currently, markets for Canadian crude oil are confined to Canada, and the U.S. Midwest, Rocky Mountains, and Pacific Northwest.  Developing and potential markets include the U.S. midcontinent, Gulf and East Coasts, and Asia.  In his presentation, Mr. Fekete reviewed the developing markets for bitumen blends with emphasis on Canada and U. S. PADDs I, II, and III.  While, the U.S. Gulf Coast is a very large potential market with high refining complexity, a pipeline is needed to transport Canadian crudes there.  The U.S. Midwest (PADD II) is currently the main market for Canadian heavy crude and is well suited because of its large coking capacity.  For the U.S. West Coast (PADD V), or Asia, new or expanded pipelines and a marine terminal are needed.  Many refinery projects targeting bitumen have been announced in both Canada and the U.S.  For synthetic crude oils (SCO), high VGO conversion capacity is needed.  To date, projects targeting SCO are limited relative to those for bitumen.

 

In closing the meeting, Bill Lywood extended his and COQA’s appreciation to the seven speakers for the time and effort involved in their presentations. Their high quality contributions provided significant insight on supply, transportation, and quality of Canadian oil destined for U.S. markets to the membership of COQA and, for that, he thanked each presenter.

Specifically with respect to the Canadian Crude subcommittee's goals and objectives,

1)  The Quick Reference Guide is an on-going project. The working group has developed a three page Data Request Form that will be distributed to the COQA membership in the coming weeks. The Data Request Form will also be available from www.coqa-inc.org and from COQA-cbwg.pbwiki.com. We will be counting on the COQA membership at large to provide the data for the Quick Reference Guide, and hope to make significant advancement by the October meeting in San Antonio, TX.

2)  The crude acidity information sharing was accomplished in the CCQTA portion of the joint meeting with presentations from both CAPP and CCQTA. Further information can be obtained by contacting the presenters.

3)  Crude Compatibility remains outstanding, and we should be able to address it more fully in San Antonio in October.

4)  The Enbridge Pipelines presentation included significant detail with regards to the logistical challenges related to too few crude tanks, running small pipeline batches such long distances, and having lines in laminar flow. Pipelines, including Enbridge and others, all have comprehensive programs in place regarding quality management, and are open to sharing their knowledge on the subject with producers, shippers, and refiners.

5)  Bryan Fuhr provided the group with a presentation on “state of the science” with respect to the challenges of analyzing heavy oils.

6)  Synthetic crudes, and issues related to them specifically, will be addressed in San Antonio.

7)  The Canadian Heavy Oil Association speakers provided insight into Canadian heavy crude production history, evolution, and upgrading technologies –  improve COQA members' understanding of Canadian production methods and logistics and how they impact refiners.

Next Steps

In San Antonio, TX in October 2008, the Canadian Crude Subcommittee plans to provide information sessions on the outstanding items related to crude compatibility and synthetic crude production and quality management. They will also provide an update on the Canadian Crude Quick Reference Guide.

Next COQA meeting:

October 23, 2008, San Antonio, TX, in conjunction with the ASTM Crude Oil Course.

Harry Giles
Director, COQA