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ALBERTA OILSANDS DRAW TWO EXTRACTION PROJECTS

March 23, 1992

Alberta oilsands continue to attract companies aiming for a breakthrough in economic development of the resource. Chevron Canada Resources Co. has started up a pilot oilsands project northeast of Edmonton using its heated annulus steam drive (HASDrive) process. In addition, Fording Coal Ltd., Calgary, and Kilborn Western Inc. plan a joint venture to develop a new oilsands extraction process. Chevron's $12 million (Canadian) pilot oilsands project in Alberta employs its HASDrive process,

Fording and Kilborn plan to invest $10 million to develop an oilsands extraction process.

At first, 2 metric tons/hr of oilsands will be processed at a Calgary facility operated by the Alberta Oil Sands Technology and Research Authority.

Negotiations are under way by the joint venture company, Bitmin Resources Inc., to set up a 10 metric ton/hr demonstration project at an oilsands operation in Alberta's Fort McMurray region. It will test the countercurrent drum separator process.

In that process, raw bitumen mixed with sand and clay is treated in a separation process with hot water and chemicals.

Kilborn Western, which has participated in design of heavy oil upgraders at Lloydminster and Regina, says energy Consumption is reduced by 50-60%/bbl and water consumption is cut by 40%. It says the process has the potential to trim production costs by $2-3/bbl. The process can take place at the mine site. Bitumen can then be shipped to an upgrader for conversion to synthetic crude.

Fording Coal is a unit of Canadian Pacific Ltd.