In the Footsteps of the Dinosaurs

The plants that grew on the marges of the Albian Sea 100 million years ago and became bitumen trapped in the Athabasca oil sands are being reborn as “synthetic crude” oil products through the efforts of Canada’s newest fully-integrated oil sands mine and upgrader, the Athabasca Oil Sands Project (AOSP). The $5-billion project reached full-operational status in April, 2003, and is currently attempting to reach the designed production rate of 155,000 barrels/day bitumen later this year.

This joint venture of Shell Canada Ltd. (60%), Chevron Canada Ltd. (20%) and Western Oil Sands L.P. (20%) consists of two parts. The Muskeg River mine and extraction plant are on Lease 13, 75 km north of Fort McMurray, Alta. The Scotford upgrader is adjacent to Shell’s Scotford refinery north of Fort Saskatchewan, Alta. Bitumen extracted from the oil sands at Muskeg River is mixed with diluent and piped 500 km south to the upgrader; recycled diluent is returned in the twin pipeline. Albian Sands Energy Inc. is the operating company created by the joint venture to operate the Muskeg River mine. The design and construction of the project were described in an article in CMJ October 2002.

Although there are others, the oil sands deposits in the Athabasca Basin of northern Alberta are the world’s largest. AOSP is the third oil sands mining operation there (the other two, Suncor and Syncrude, are described in other articles in this issue), and is the first new fully-integrated oil sands project in Canada in 25 years. The basin’s oil sands are an enormous hydrocarbon resource. The AOSP alone is capable of supplying the equivalent of 10% of Canada’s oil needs, over a 30-year lifespan.

Not surprisingly, the Scotford refinery is the single biggest customer for synthetic crude from the upgrader; it produces various petroleum products such as gasoline, diesel and jet fuel.

Innovative equipment and maintenance

The Muskeg River mine has built up a fleet of 23 of the largest haul trucks in the world–Caterpillar 797Bs, each with a 400-ton payload. These trucks are not just new; they are prototypes. Finning (Canada) is supplying the trucks and ancillary equipment.

The loading equipment consists of four Bucyrus 495 HF electric rope shovels with 100-ton buckets. Three have been commissioned so far at Muskeg River, and the fourth is under construction.

The mine has entered into innovative maintenance agreements with Finning (Canada) and Bucyrus for the maintenance of the pit equipment. The Maintenance and Repair Contract (MARC) created jointly by Albian Sands and the vendors ensures the most qualified mechanics and engineers are maintaining the equipment on site as part of Albian’s mine maintenance team. The MARC is an innovative approach to ensure full optimization of the mining equipment.

Award-winning froth treatment technology

Most of the technology used in the extraction plant at Muskeg River is proven. The hydroconversion technology chosen for the upgrader is also commercially proven. However, hydroconversion required a cleaner bitumen feed than would the more common coking technology–with no water (and its dissolved salts) and only one-tenth the clay (a few parts per million)–and that required the invention of a new process in the extractor.

Dr. Bob Tipman and Dr. Bill Power of Shell Canada with associates from Canmet invented, designed and tested a froth treatment method that uses paraffin (instead of naphtha) and uses a mining technology (counter-current decantation, or CCD) rather than a centrifuge. A $25-million pilot plant tested the technology between 1997 and 1999. The positive results led to the go-ahead decision in 1999 and the building of the full-scale commercial plant.

Not only does paraffin treatment result in cleaner bitumen, it selectively removes the heaviest molecules–the ashphaltenes that make up about 16% of the bitumen. According to Neil Camarta, CEO of Albian Sands Energy and senior vice-president for oil sands at Shell Canada, “The light, pure bitumen [from the Muskeg River extraction plant] sets us up very well for maximum conversion at the upgrader.” Instead of the upgrader using coking technology to make 85 barrels (bbl) of synthetic crude from 100 bbl of bitumen (with 15 bbl of waste in the form of carbon and clay), hydroconversion actually makes 103 bbl of synthetic crude by adding hydrogen.

The extraction plant has been working according to plan and the new technology has proven itself so well that it received a prestigious award in September from ASTech, the Alberta Science and Technology Leadership Foundation, for innovation in oil sands research. The paraffin treatment has received some interest, and outsiders are coming to have a look, according to Camarta.

Excellent start-up despite difficulties

The giant AOSP project is no dinosaur. From project approval in late 1999 to the first ore in the extraction plant in August 2002 took only 140 weeks. The first bitumen was produced on December 29, 2002, and the mine and upgrader were turned over to operations at year-end.

Production of 60,000 bbl/day bitumen had been achieved when an early January 2003 fire in the froth treatment area of the extraction plant halted operations. The electrical fire had damaged much of the heat tracing that kept the plant warm, so the severe weather caused more damage through freezing. The cost in damage repair and related expenses was about $150 million, some of which has been recovered from project insurance.

Production resumed on April 4. The start-up has gone relatively smoothly since then, particularly in the upgrader. Total production averaged 60,000 bbl/day in the second quarter (85,000 bbl/day in June), and the project had achieved the full design production rate of 155,000 bbl/day of bitumen for short periods in July.

Camarta said in a September interview with CMJ that he wouldn’t tip his hand about third quarter results, but that “nothing bad has happened in this quarter. There are always surprises,” he said. “This is a horribly complex project with thousands of pieces of equipment and people. They don’t always perform as advertised, but the technology is working well. There are mechanical things we’re still working on. There have been no incidents.”