Alberta eases royalty on five pilot projects

By OGJ editors

The Alberta government has awarded royalty allowances worth a total of $33 million to five pilot projects designed to improve recovery rates and lower environmental effects of oil sands and conventional oil and gas production.

Contributions from the four companies receiving assistance under the Innovative Energy Technologies Program will total $173 million. Since its start in 2004, the $200-million program has supported 46 projects.

Recipients of the latest round of royalty help are:

Imperial Oil Ltd. for a pilot at its Cold Lake project involving a cyclic solvent process, which uses propane and propane-diluent solvent injection and production cycles to mobilize heavy oil instead of using steam. The royalty allowance is $10 million for a project expected to cost $100 million.

Cenovus Energy Inc. for a 10 Mw chemical looping steam generator at its Christina Lake thermal project. The specialized steam generator keeps carbon dioxide separate from other gases emitted during combustion, avoiding the need to remove CO2 after combustion and making pure CO2 available for capture and storage. The royalty allowance is $10 million, the total project cost $62 million.

Perpetual Energy for a low-pressure electro-thermally assisted drive pilot 75 km north of Red Earth. The project will use three parallel horizontal wells with electric cables to heat bitumen with water or solvent injected during electrical heating. Perpetual Energy expects the process to require less energy and water than conventional steam-assisted gravity drainage. The project cost is $18.2 million, the royalty allowance $5.46 million.

Cenovus for a sand-alkali-surfactant associative polymer flood in conventional oil production at Canadian Forces Base Suffield near Medicine Hat. The pilot is expected to encourage conservation of fresh water in enhanced recovery. The royalty allowance is $5.37 million for a project costing $17.9 million.

Canadian Natural Resources Ltd. for a pilot at its Horizon mine near Fort McMurray involving two processes to treat, recycle, and reuse high-saline and process-affected water. The project cost is $8.32 million, the royalty allowance $2.496 million.

 

 

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