Oil Sands 101: Process Overview

Oil Sands 101: Process Overview

There are two ways to extract bitumen from the oil sands: either mine the entire deposit and gravity separate the bitumen, or extract the bitumen in-place (or in-situ) using steam without disturbing the land. The technique used depends on the depth of the deposit.

About 10% of the world's oil reserves are located in the Alberta oil sands. These deposits are estimated to hold almost 2 trillion barrels of oil, but less than 10% (about 166 billion barrels) are recoverable with current technology. Over 96% of Canada's total oil reserves are contained in the oil sands.


Oil sands are a loose sand deposit which contain a very viscous form of petroleum known as bitumen. Oil sands are actually found all over the world and are sometimes referred to as tar sands or bituminous sands

Alberta's oil sands contain on average about 10% bitumen, 5% water and 85% solids. Most of the solids are coarse silica sand. Oil sands also contain fine solids and clays, typically in the range of 10-30% by weight.

Bitumen is a heavy complex hydrocarbon, contained within the oil sands deposit. Bitumen is almost solid at room temperature and has a tar-like consistency. As will all heavy oils in general, Alberta bitumen has a relatively higher concentration of nitrogen, sulphur and heavy metals.

DID YOU KNOW? About 80% of the world's oil reserves are state-owned. Only 20% are open to private investment, almost 50% of which are located in the Alberta oil sands.


Petroleum products are produced from the oil sands through 3 basic steps:

  1. Extraction of the bitumen from the oil sands, where the solids and water are removed
  2. Upgrading of the heavy bitumen to a lighter, intermediate crude oil product
  3. Refining of the crude oil into final products such as gasoline, lubricants and diluents.

Traditionally, a majority of the bitumen produced in Alberta was upgraded into synthetic crude oil before being sold to refineries on the open market. However, some bitumen is good enough to send directly to a high-conversion refinery that has the ability to process heavy/sour crude. Examples of diluted bitumen sold directly to refineries includes product from in-situ facilities around the Christina Lake and Cold Lake areas, diluted bitumen from Imperial Oil's Kearl Lake Mine and upcoming production from Suncor's Fort Hills project.

Currently about 40% of the bitumen produced in Alberta is upgraded to synthetic crude oil. The remaining 60% is diluted with condensate and sold directly to market, without an intermediary upgrading step.


The Alberta oil sands hold an estimated 166 billion barrels of recoverable oil, representing over 96% of Canada's total reserves. The method used to extract bitumen from the oil sands depends on the depth of the deposit. If the deposit is near the surface, the oil sands is mined and sent to a bitumen processing plant. For deposits that are deep below the surface, bitumen is extracted in-situ (or in place). Both facilities produce a relatively clean bitumen product which is mostly free of sand and water.

Steam is injected into the oil sands deposit, reducing the viscosity of the bitumen. The mixture of bitumen and water is pumped to the surface where the water is recovered and recycled.

The deposit is mined and trucked to a main processing plant. Hot water is added to the oil sands, producing a pumpable slurry. Bitumen is recovered through a gravity separation process.

About 20% of Alberta's bitumen reserves are close enough to the surface to be mined. The remainder are much deeper and can only be recovered in-situ. Although in-situ production traditionally had lower recovery rates, recent advancements in technology have significantly improved bitumen recovery. In-situ extraction is expected to lead the growth in bitumen production over the coming decades.


Bitumen naturally contains a large fraction of complex long chain hydrocarbon molecules. The fraction depends on the geology of the reservoir and process used to extract the bitumen.

About 40% of bitumen produced from the oil sands requires an intermediate upgrading step for partial removal of the heavy hydrocarbon fractions and conversion into light synthetic crude oil (SCO). The SCO is then sold to refineries on the open market.

The remaining 60% of bitumen produced is blended with a lighter hydrocarbon (diluent) and sold directly to the open market. Many North American refineries are now designed to accept heavy oil streams, as long as the solids and water content is kept relatively low (less than 0.5%). Non-upgraded bitumen is also sour, containing a relatively high sulphur content.


Bitumen produced from the oil sands is too heavy to be sent directly to a conventional refinery due to its high asphaltene and sulphur content. Depending on the extraction process used, bitumen can sometimes contains as much as 2% water and solids, which does not meet pipeline specifications for long distance transport. This product is therefore upgraded into a light synthetic crude, which is then sold on the open market.

Upgrading is a process by which bitumen is transformed into an lighter and sweeter crude by fractionation and chemical treatment. This improves the quality of the oil, reducing its viscosity and sulphur content. The SCO product is then sent to a downstream refinery for conversion into final product. About 40% of Alberta's bitumen is currently upgraded before being sold to market.


Refineries convert crude oil feedstock into value added final products for consumer and industrial use. These refined products include fuels such as gasoline, kerosene and diesel, as well as other consumer products such as oil lubricants and asphalt.

Not all refineries are built the same. Simple refineries can only process light crudes with a low sulphur content (sweet). Complex refineries have the ability to process heavier feedstock with a much higher sulphur content (sour).

Due to the rising production of heavy crude oil from Canada, Venezuela and Mexico, most Gulf Coast refineries have been modified to better handle heavier crude streams, which are generally less expensive than light/sweet crude. These refineries are known as high-conversion refineries and have the ability to accept sour crude oil streams with up to 10% heavy fractions, as long as the water and solids content is kept relatively low.

As more and more refineries around the world convert to heavy oil feedstock, there is less of a demand for stand-alone bitumen upgrading. The economics of upgrading therefore lies in the price differential between heavy diluted bitumen and light crude oil.

DID YOU KNOW? The world's unconventional heavy oil reserves are much bigger than conventional light oil. That's why more refineries are being built (or retrofitted) to process heavy, sour feedstock.


Crude oil from the Alberta oil sands (including diluted bitumen) is commonly transported to US and Canadian refineries by pipeline. About two-thirds of Alberta's exports to the US are destined for the Midwest area, centred around Chicago.

Due to constraints in pipeline capacity and routing, crude oil transport by rail has become increasingly popular in recent years, climbing from near-zero in 2011 to almost 200,000 bbl/day by the end of 2014. Shipment by rail to the US was mostly destined for the US Gulf Coast. However, expansion of pipeline capacity to Quebec, Ontario and the US Midwest has reduced demand for rail transport. Nonetheless, crude-by-rail remains an important back-up mode of transport if new pipeline capacity does not come online in the next few years.

DID YOU KNOW? At the end of 2016, Canada's crude-by-rail loading capacity was approximately 775,000 bbl/day.


  • The oil sands emit about 60 megatonnes of greenhouse gases (GHG) per year, representing 8.5% of Canada's total emissions and 0.13% of global GHG emissions.
  • About 80% of the GHGs contained in a barrel of oil are emitted by the end user during combustion. Bitumen extraction, upgrading and refining account for the remaining 20%.
  • In-situ bitumen production has a slightly higher carbon footprint due to its heavier reliance on steam production. Bitumen produced from mined oil sands is 2% more GHG intensive than the average barrel of oil processed in the US versus a 5% difference for in-situ bitumen.

  • Every barrel of bitumen produced from mined oil sands requires about 3 barrels of fresh water, mostly sourced from the Athabasca River. Mine operators account for about 0.5% of Athabasca River flows, far below their allocated water supply.
  • In-situ bitumen production requires only 0.3 barrels of water per barrel of bitumen, sourced mostly from ground water aquifers.
  • About 85-90% of process water used for bitumen production is recycled.

  • Alberta's oil sands covers a total of 142,000 km², only 3% of which is close enough to the surface to be mined. The remaining 97% can only be extracted in-situ with minimal land disturbance.
  • Oil sands mining accounts for about 900 km² of land disturbance, representing 0.6% of total oil sands surface area and 0.028% of the entire Canadian boreal forest. That includes both tailings ponds and mine pits.
  • Mine operators are legally required to reclaim and remediate disturbed land once the mine is depleted and the tailings pond is no longer in use.

Oil Sands Geology & the Properties of Bitumen

Oil Sands Geology & the Properties of Bitumen