One of the biggest challenges with the bitumen that is extracted in Alberta’s oilsands is that the product has a very high viscosity, which makes it difficult to transport. But MEG Energy’s new HI-Q project in the Industrial Heartland hopes to have a solution.
Raw bitumen is very thick, which makes it very difficult to send by pipeline. To lower the viscosity of the bitumen to make it easier to transport, the product is diluted so that a typical mixture coming down a pipeline is two parts bitumen and one part diluent. Currently, once the bitumen arrives in the Industrial Heartland it can either be upgraded into synthetic crude, which is lighter and less viscous than bitumen, or it can be transported with the diluent. MEG is hoping their HI-Q project will present an attractive alternative.
“Six or seven years ago we had eight potential upgrader projects proposed for the Heartland. The economic case for those melted away due to high capital costs,” said Neil Shelley executive director of Alberta’s Industrial Heartland. “The next thing that was looked at was exporting raw bitumen out of Alberta to the United States or the Far East for upgrading. But HI-Q is the next step.”
The HI-Q project is aiming to offer a different solution, according to Brad Bellows, director of external communications for MEG Energy. Rather than building an expensive upgrader or diluting the bitumen, MEG has developed a low-intensity heat process that separates the lighter portion of the bitumen from the heavier. Then asphatenes, which Bellows said have the consistency of crushed coal, are removed from the bitumen to make it less viscous.
Bellows said that the process was developed using existing technology in an innovative new process that has been patented by MEG. The company has been bench testing the process and is now about to break ground on a larger pilot project in the Heartland. The field demo will process roughly 1,500 barrels per day of bitumen.
According to Bellows, between construction, start up and operation, the pre-commercial pilot project will last approximately three years. MEG will then evaluate the project, the process and its economics and decide if they will build a full-scale facility. Bellows said if the pilot is a success, there is potential to build a facility capable of handing 60,000 barrels per day. The company has purchased land in Strathcona County that would accommodate the project.
Another benefit of HI-Q would be the ability to recycle diluent. MEG would use diluent to transport bitumen from its Christina Lake holdings to its Industrial Heartland facility. Rather than shipping both bitumen and diluent out of Alberta, the diluent would be removed and sent back to Christina Lake to be used again.
“We’re very to pleased to see this project moving forward,” said Shelley, noting the although the many of the upgraders didn’t make financial sense, there is still a need to get bitumen to market and not using diluent is a huge benefit. “Two parts bitumen are blended with one part diluent, which means diluent is consuming one third of all of our pipeline space. That seems like kind of a waste.”