Increasing pipeline capacity - without building new pipelines
Privately-held Fractal Systems says it's now ready for "commercial deployment" of its partial upgrading technology in the oil sands.
From August 2016 to August 2017, the company ran a 1,000 bbl/day demonstration plant near the town of Prevost, Alberta. Over 225,000 barrels of bitumen were partially upgraded using the company's Enhanced JetShear and Acid Reduction Process (ARP). The bitumen was sourced from an unnamed SAGD operator located south of Fort McMurray. Fractal says the demo plant was a success, and it's now ready for commercial deployment of the technology.
A DIFFERENT APPROACH TO PIPELINE BOTTLENECKS
Partial upgrading could be Alberta's answer to boosting its oil export capacity. Bitumen produced from the oil sands is too heavy and too viscous to be shipped by pipeline. Generous volumes of diluent, typically natural gas condensate, is added to the bitumen in order to meet pipeline specs. That diluent takes up valuable space in the line, typically about one-third of the total volume, reducing total capacity on the system.
Aside from pipeline constraints, diluent is expensive, costing as much West Texas Intermediate, reducing net-backs on every barrel of bitumen sold.
At the heart of the company's partial upgrading technology are Fractal's proprietary jet-nozzles. Undiluted bitumen is pumped to the JetShear modules, where the bitumen is heated to a temperature just below cracking. The nozzles cause cavitation, resulting in a rapid pressure change, shearing the bitumen and re-arranging its molecular structure. The resulting product has a lower density and lower viscosity, without any loss of yield. The bitumen product still requires diluent addition before pipeline transport, but volumes are reduced by as much as 45%.
For additional upgrading, the Enhanced JetShear module removes olefins from the naphtha stream using a low-pressure catalytic hydrogen polishing unit. Diluent volumes can then be reduced by up to 60%. This allows for up to 25% more bitumen to be transported in the pipeline, dramatically freeing up capacity.
Aside from viscosity, bitumen produced from the oil sands is also contains a high concentration of naphthenic acids, which corrodes refinery equipment and reduces the selling price of the bitumen. Fractal's ARP process thermally destroys the acids, reducing the product's Total Acid Number (TAN) from a typical industry average of about 2 mg to less than 1 mg KOH/g.
A MUCH LESS EXPENSIVE SOLUTION
Given the exorbitant costs of building a full upgrader and the regulatory headaches of building new pipelines, partial upgrading might just be a partial solution to solving both problems. Fractal estimates a 50,000 bbl/day facility adjacent to a SAGD operation would cost about $300 million, a fraction of the cost of a full upgrader.
More take-away capacity and more value-add ... a win-win for both Alberta and the oil sands industry in general.
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