CNRL applies for dilbit production at Horizon Mine, sans upgrading

CNRL applies for dilbit production at Horizon Mine, sans upgrading

Canadian Natural Resources (CNRL) has submitted an application to the Alberta Energy Regulator (AER) to add a 45,000 bbl/day expansion at its Horizon Oil Sands Mine, located about 80 km north of Fort McMurray, AB.

Horizon already has approvals in place for 250,000 bbl/day of light/sweet synthetic crude oil (SCO), produced at the Horizon Upgrader. This latest expansion will be for non-upgraded partially deasphated bitumen (PDB), similar in quality to diluted bitumen (dilbit) produced at Imperial Oil's Kearl Mine and the new Fort Hills Mine, operated by Suncor Energy. 

If approved, this latest expansion will add 16% of additional capacity at Horizon, boosting the company's total upstream production by about 4%. 

ADDING HTPFT TO THE HORIZON FLOWSHEET

The additional production will come from the construction of a new Froth Treatment plant, to be located within the boundaries of Horizon's existing Central Processing Facility. The new plant will employ a High Temperature Paraffinic Froth Treatment (HTPFT) process, similar in design to the process used at Jackpine, Kearl and Fort Hills. HTPFT produces a marketable bitumen product, which is diluted and pipelined to market.

CNRL Horizon Central Processing Facility Plot Plan with HTPFT addition HORIZON CENTRAL PROCESSING FACILITY (CPF) WITH NEW HTPFT EQUIPMENT (COURTESY CNRL)

ADDING NEW POTS AND PANS TO BITUMEN PRODUCTION

The new HTPFT facility will include two Froth Separation Units (FSU), operated countercurrently at about 90°C. 

Solvent and bitumen froth produced by the Extraction plant will be added to the FSUs is order to precipitate some of the heavy asphaltenes contained in the bitumen. The solvent-to-bitumen (S:B) ratio in the FSU will be about 1.8:1 by mass. The FSU produce a partially deasphalted bitumen (PDB) with a generous volume of solvent. The solvent is subsequently removed in the Paraffinic Solvent Recovery Unit (PSRU), a three-stage distillation process, where the solvent is flashed off and recycled back to the FSUs.

Tailings from the FSUs are sent to the Tailings Solvent Recovery Unit (TSRU), where two flash columns are operated in series. The TSRUs flash off any residual solvent, which is also returned back to the FSUs. Solvent-free tailings, consisting mainly of water, fine solids and precipitated asphaltenes, are deposited in the tailings pond for future reclamation.

A Vapour Recovery Unit (VRU) collects and condenses off-gases from the FSUs, PSRUs and TSRUs. Solvent recovered from the off-gasses are recycled within the HTPFT process. Aside from the main process equipment, additional utilities will be added, including an auxiliary boiler, cooling tower and new storage facilities for the solvent and diluted bitumen product.

CNRL Horizon HTPFT Expansion - Simplified Process Flow Diagram HTPFT EXPANSION - SIMPLIFIED PROCESS FLOW DIAGRAM (COURTESY CNRL)

ADDING NEW POTS AND PANS TO THE UPGRADER

Unlike counterparts at Kearl and Fort Hills which purchase solvent on the open market, CNRL plans to produce its own solvent at its adjacent upgrader. A Solvent Production Unit (SPU), to be located next to the Naphtha Hydrotreater, will produce a blend of isopentane (i-C5) and normal pentane (n-C5). CNRL says its pentane mixture is a substantial component of the hydrotreated naphtha already produced at the Horizon upgrader, which is readily available on site. 

EXPANDING EXTRACTION TO PRODUCE MORE BITUMEN FROTH

In order to allow for additional production capacity through Extraction, the company plans to add a Lean Froth Cleaning System to produce more bitumen froth.

Under the current configuration, fine middlings from the Primary Extraction Cells (PSCs) are processed in a series of flotation cells, producing a low-quality flotation froth which is recycled back to the feed of the PSC. Since this froth contains a generous volume of fine solids, this increases the fines circulating load in the PSC, reducing the vessel's separation efficiency.

In order to produce more feed for Froth Treatment, CNRL now plans to clean the flotation froth in a new atmospheric separation unit, sending the "cleaned" flotation froth directly to Froth Treatment. Removing the flotation froth recycle back to the PSC will reduce circulating loads and allow the Extraction circuit to process more feed from the mine. 

CNRL also plans to expand its mining fleet in order to increase oil sands supply to the plant. The company says this expansion has the potential to shorten the end-of-mine life (EOML) by two years, from the current 2055 to 2053.

PRODUCING MORE DILBIT FOR EXPORT

PDB produced from the new HTPFT plant will be diluted with hydrotreated naphtha, supplied by the upgrader, and shipped to market via pipeline. The company says it doesn't foresee a need to buy condensate from the open market, but will likely need a dilbit pipeline to "optimize product transportation logistics." 

SCO product from Horizon is currently shipped to market on Pembina's Horizon Pipeline. TransCanada's future White Spruce pipeline will connect the site to the Grand Rapids Pipeline, which is primary used to ship diluted bitumen. TransCanada says White Spruce will be operational by the end of next year, but CNRL did not confirm what lines which pipeline be used to transport its PDB.

CNRL says it plans to commence early works construction in the third quarter of next year, with start-up expected by the middle of 2022 assuming oil prices hold up and all regulatory approvals are received in time. Assuming a dilution ratio of 35% by volume, this expansion will add about 60,000 bbl/day of dilbit to the market.

Western Canadian Crude Production Forecast - CAPP WESTERN CANADIAN CRUDE OIL SUPPLY FORECAST (COURTESY CAPP)

MORE HEAVY OIL PRODUCTION FOR ALBERTA

The expansion isn't all good news for Alberta, however. The provincial government had hoped to entice oil sands operators to invest in upgrading or partial-upgrading, in order to produce a higher quality product that fetches a better market price and doesn't require dilution before export. Diluted bitumen volumes from the oil sands are expected to grow from the current 2.7 million bbl/day to over 4 million bbl/day by 2030, putting more pressure on the Canada's strained pipeline infrastructure. Most of Alberta's dilbit is exported to the US, which have the required refining capacity and complexity to process heavy, sour crude from the oil sands.

Completion of the Trans Mountain Expansion and Line 3 Replacement will add another 960,000 bbl/day of export capacity, which won't be enough to cover expansions that are already in the works. It would appear Alberta's heavy oil producers are also banking on TransCanada's 580,000 bbl/day Keystone XL pipeline to eventually get built.

MAKING CNRL A LITTLE HEAVIER AND HORIZON A LITTLE GREENER

CNRL currently produces about 115,000 bbl/day of bitumen, representing about 12% of its total upstream production. A planned expansion at Kirby North will boost heavy oil production closer to 160,000 bbl/day by the end of next year. Once completed, this latest HTPFT expansion at Horizon will bring CNRL's total diluted bitumen production over 200,000 bbl/day, which will account for close to 20% of the company's total upstream production.

CNRL asserts there will be little to no environmental impacts on water or land use. HTPFT product will have a significantly lower GHG emissions per barrel than existing SCO production, thereby lowering Horizon's overall GHG intensity.

The expansion has an estimated capital cost of about $1.4 billion.

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