Newspaper article The Canadian Press

New Technologies Dull but Don't Cure Canada's Export Oil Pipeline Headaches

Newspaper article The Canadian Press

New Technologies Dull but Don't Cure Canada's Export Oil Pipeline Headaches

Article excerpt

Tech offers partial answer to pipeline shortage


CALGARY - The potential cancellation of the Trans Mountain pipeline expansion is putting a spotlight on oilpatch innovations that might mitigate the need for export capacity as oilsands production rises.

But even the most ardent supporters of the new technologies agree Canada is still going to need new pipeline space.

"What I think we should be doing is using the existing pipeline space we have to ship as much money out of Alberta as we can," said Ian MacGregor, president of North West Refining, operator of the just-opened Strathcona Refinery northeast of Edmonton.

"We should be making the most economically dense things we can."

He said the $9.6-billion refinery, the first new refinery in Alberta in 30 years and the first in the world to be built from scratch with a carbon capture component, is processing upgraded synthetic crude now but should move to processing raw bitumen in the next two months.

When fully operational, the refinery will take in about 80,000 barrels per day of diluted bitumen, extract about 30,000 bpd of diluent for return to the local market, then convert the remaining bitumen into 40,000 bpd of diesel, about 7,000 bpd of low sulphur marine fuel and about 4,000 bpd of naphtha, a liquid hydrocarbon mixture.

MacGregor said the lack of pipeline space in Western Canada has driven down the price of bitumen, which improves refinery profit margins, and is a positive factor in eventually expanding it.

If the refinery is expanded, however, its diesel production would exceed local demand and would need to be exported by rail or pipeline to other markets. He said diesel sells for about $150 per barrel now, around four times the price of raw bitumen.

Meanwhile, research continues on partial upgrading technology that, like the Strathcona refinery, would reduce or eliminate the need for tying up export pipeline space with diluent. Such facilities would cost much less to build than the full upgraders employed at some oilsands mines.

"Partial upgrading ... can help diversify the economy and improve the value of Alberta's resources by providing a new product to new markets," said Davis Sheremata, spokesman for oilsands producer MEG Energy Corp. …

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