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Oil & Gas Processing Review - 2006
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From Oil Sands Bitumen to Petrochemical Feedstock
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Catherine J Laureshen
Senior Research Manager, Alberta Energy Research Institute
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Originally printed in:
Oil & Gas Processing Review
- 2006
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A rapidly expanding oil sands industry and a dwindling supply of feedstock for Alberta’s ethanebased petrochemical industry have stimulated interest in evaluating bitumen for producing a broad slate of refined products, including petrochemicals. Industry and government have jointly commissioned several studies to examine different process schemes integrating oil sands, refining and petrochemical operations to convert heavy gas oils into both refined products and petrochemicals. Due to the fact that market demand for fuels and refined products far exceeds that for petrochemicals, the performance characteristics of the heavy oil conversion processes are important to optimise the volume ratios of the products to meet market volume demands.
There are a number of different heavy oil processing technologies that could potentially produce petrochemical feedstock from heavy gas oils, including conventional non-catalytic thermal (steam) cracking and various catalytic processes. All of these technologies are at different stages of commercial development for production of fuels and olefins, and would need to be adapted to process Alberta’s aromatic bitumen-derived heavy gas oils.
Background
Alberta has an enviable position as a North American energy hub, providing oil and gas to US markets through an extensive pipeline network. In addition to conventional oil and gas, Alberta has large reserves of coal and coal bed methane, as well as the massive oil sands deposits that underlie 140,800km2 of the province. The oil sands have outstripped conventional oil reservoirs as the primary source of oil in the province. If all new projects, and expansions to existing projects, currently planned take place as scheduled, Alberta’s bitumen production is expected to have tripled by 2030.
However, the continued expansion of Alberta’s oil sands faces significant challenges. Diluent availability is already a problem, water use is facing restrictions and natural gas is becoming more costly and less available. A further problem is the ability of Canadian and US markets to absorb additional bitumen and synthetic crude production. Refineries in the US Midwest (Petroleum Administration for Defense Districts (PADD) II), which is the largest traditional market for oil sands products, cannot process the projected increase of heavy feedstock without additional residual upgrading capacity. The alternative is to build upgrading capacity in Alberta, which could increase production costs and make Alberta crude less competitive in the export market.
Natural gas cost and availability is not only an issue for the oil sands industry. Alberta’s petrochemical industry is the largest in Canada; its four petrochemical plants have a combined annual production capacity of 3.9 million tonnes of ethylene, polyethylene, ethylene glycol and linear olefins, and two of these plants are the largest in the world. However, the rapid expansion of Alberta’s petrochemical industry in the past three decades was based on an abundant supply of low-cost ethane derived from natural gas liquids. New highpressure ‘wet’ gas pipelines, high natural gas prices and diminishing production from the Western Canadian Sedimentary Basin have raised concerns about whether or not the supply of competitively priced feedstock essential to this industry can be sustained. Oil sands crude is rich in aromatics, which is a detriment when exporting to conventional refineries; however, these aromatics could provide a potential source of petrochemical feedstock.
The need for additional bitumen and synthetic crude oil markets, as well as additional upgrading/refining capacity, has prompted a number of joint industry/ government studies to evaluate new markets and product options, including the production of a broad slate of refined products and petrochemical feedstocks from bitumen. Following is a brief discussion of several of these studies and the technology options under examination.
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Catherine J Laureshen is a Senior
Research Manager, responsible for
the upgrading and university
research programmes of the Alberta
Energy Research Institute (AERI).
Prior to joining AERI, she taught in
the Department of Chemical and
Petroleum Engineering at the
University of Calgary, and was a
member of the In Situ Combustion
Research Group. Dr Laureshen is an
active member of the Petroleum
Society of the Canadian Institue of
Mining, Metallurgy and Petroleum
(CIM), sitting on the national board
and chairing the publications board.
She is the Technical Chair for the
2006 Canadian International
Petroleum Conference and will be
the Conference Chair in 2007.
Dr Laureshen is also a member of
the Canadian Heavy Oil Association
(CHOA), the Society of Petroleum
Engineers (SPE) and the Association
of Professional Engineers, Geologists,
and Geophysicists of Alberta
(APEGGA). She has a PhD in
mechanical engineering, with a
specialisation in fluid dynamics.
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