Tue, 9 Sep 2008|
Bob Tippee, Editor Oil & Gas Journal, welcomes everyone to Alberta, Canada and the Oil Sands Heavy Oil Technologies conference in July 2008. The event focuses on changes in the industry that have occurred within the past year, as well as: environmental issues; sulfur; power fuel and infrastructure; ...
I. Yeah. Metal halo corporation -- it's my pleasure and honor to welcome you to the opening session. The second annual oil sands and -- -- -- technologies conference and exhibition. I'm Bob -- and editor of oil and gas journal and a director of the conference. It was at this stage that I was to call on some -- from conference. Security to give the security message so looks like -- we have now when they're solid to say if we have a security situation. The -- is that way go down the elevators and an outside. If there's more to it than that. Are pleading ignorance. And no it's a pleasure to be back in that in Calgary to discuss the interaction viewed human ingenuity with a -- -- challenging gift of nature. In this venue last year we had a great inaugural -- inaugural event. And -- and you were in attendance then since then of course much has happened price of crude oil has skyrocketed. The costs have soared as well. Personnel and material shortages of ground. Alberta -- and royalty regime. Canada and Alberta have new programs for cutting emissions of greenhouse gases. And certain politicians. -- certain levels of government in the United States have begun acting finicky about the types of oil their country imports. Also in the past year operating companies and their support industries -- develop new technologies. For producing and processing -- human. And for taking it to market. In other words the past year has given us much to talk about. The technical part of this event which starts tomorrow addressed technologies and a number of areas. Environmental challenges sulfur. Power fuel and infrastructure. Extraction methods upgrading methods in CO2. The technical sessions we'll file tomorrow morning's keynote session. We will hear from Alberta is parliamentary assistant energy. And representatives of the Alberta energy research institute in Alberta environment. In at the end of the conference Thursday after lunch you'll have the chance to ask questions and share your views on. A variety of important issues -- alive and what I think will be lively. Video webcast. Speak kind of experimental but while tying an Internet audience have a lot of in interaction and I in turn encourage you to attend. And to participate. The conference program represents the work of an advisory board made up of experts and -- in various segments of the oil sands industry. Penn -- colleagues and I are grateful to them for helping us assemble a conference that I know you'll find stimulating in useful in your work. -- introduced the advisory board members who Mal last to stand as I -- their names please hold your applause until we have them on their feet. Presley -- ConocoPhillips. And -- up Suncor Energy. -- ton of well resources. Paul Brown of equinox engineering. Frank forte. A Jacobs candidate who unfortunately can't be with us. Michael Freeman of MIS wacko. Teresa Hansen. Derrick and Donald Alston Canada. Randy McGill and Siemens Canada limited. -- just more it is of oil and gas journal. Peter Mac a layer of -- solutions. Jim kind of -- -- research and development. In -- -- kind of council incorporated. And -- now to show your appreciation for their hard and creative. I'd also like to acknowledge the invaluable help. The -- in -- board received. Related organization of the whole thing -- from the conference manager -- kilo. By Chris -- both -- -- well scales back there are organizing something on them. -- of course this this form wouldn't be possible without the support of our sponsors. I'd like to thank and again please hold your applause until I finish the list also mark gold sponsor. In grain our silver sponsor. -- -- -- heart hatch sergeant Monday and tech street for continental breakfast tomorrow and Thursday. And energy for lunch tomorrow. -- -- water solutions and technologies for the conference proceedings. ConocoPhillips in San -- for specific conference tracks. And in -- again and SAP. For the webcast please join me and showing your our appreciation. Our flagship media sponsors are oil and gas journal. Our engineering oil and gas financial journal offshore. Oil gas and petrochemical it -- all published by -- well. Intermedia partners are oil weak and oilsands review. At the conclusion of this session be sure to stay around for reception in the exhibit hall right next door. -- that I know you'll enjoy that. At our speakers. I'll introduce them one by one and after we've heard all three presentations you'll be able to ask them as them some questions we have a a stand up Mike in the -- so when it comes time for questions I'll just ask you -- line up. At the at at the microphone but they'll be after all three. -- senators have made their presentations. I'm gonna keep this brief you have here you have biographies in your program. -- first speaker is Thomas H wise and vice president of purple and Gertz incorporated here in Calgary. Mr. wise to spend most of his career in Canada except for three years of service in the P&G Los Angeles office during the 1990s. He's been a PG consultant for more than 27 years. You can read more about him again all of our speakers -- your program please welcome Thomas H wise. Thank you bop. I'd like to thank cap and wealth or asking me -- come back and that the again this year. I was fortunate enough to be the leadoff speaker last year and I guess. Maybe -- to try to come and get it right this time. We were not forecast 240 dollar oil so if we get -- again. And also since and the first speaker offers a like to take government welcomed visitors to calorie and Canada. Hopefully at some have you been able to enjoy a your time here at stampede or are in the Rocky Mountains are. If not don't -- home until it it. And virtually -- -- over -- have to wait till next year. I'm gonna do speak on the intersection. Oil sands markets and technologies since this is a technology conference. I want to try to do a pass on a few words that would. -- tried to bring the two together. See how there that's history does work. The -- we'll follow B -- market overview. Talk a little bit about bitumen blend -- -- synthetic -- our synthetic. Greenhouse gas considerations and some pricing signals. Before we get to that. Hopefully a lot of you know -- -- and -- is but some humane not we're. Private independent energy consultants the -- worldwide with headquarters in Houston. We've got a calorie offices that 1973. -- a lot of our work has involved oil sands says ever since that time. We do short and long range forecast related to the market supply and demand and pricing. -- also get involved in refining and upgrading process technologies and costs and economics. And -- -- besides working -- oil companies and governments and pipelines we also worked for banks and investors. -- initial project reviews and sometimes monitoring projects is -- going forward. The intersection as they called it. Combines. Technology -- markets. Via upgrading technologies that are employed. Determine the product quality that's going to market as well as the yield. As both costs and but the environmental footprint would look like. I should say I'm gonna focus mostly on not -- in refining here not so much on upstream. Production number mining methods. Once the product is determined in the product quality impacts the market. Marketability. Demand for -- -- market for the product. And ultimately its value in its price. The price the yield -- her major economic drivers for oil sand season and upgrading. So the the product that comes on the operator can be range over world wide variety of qualities which we'll talk about. Elect column designer records. Because if you -- spending -- what technologies start with you can end up with. On Bosnia -- chosen target. The economics may -- a lot. The just to creek production outlook everyone as their own that. But the studies show that it in Canada the oil sands production is expected to overtake the conventional and grow. By a longshot. And a more than offset the decline. I should say since our production forecast of last year we have reduced it to others might say delayed some start up of certain projects. Which makes a little bit to lower over the long run. Others have done that as well. Cap for instance and a that's -- due to Somalia project risks and being reevaluated the high costs and net difficulties -- nurses to. Build projects in -- -- up. Also -- And delays these days seems to be environmental uncertainty. And I'll talk a little bit about that later on. The supply of oil sands when you -- get right down to it breaks up in two heavy. Pitchman bland and synthetic crude oil in -- remain an attempt to show how they go together first callers -- Huge increase in the total production. But the starting from the bottom we showed kill bit which is bitumen diluted with compensate. After earlier material. And the future supply of that -- and now in the -- production but the availability of compensate. We do. Pipeline. In the works called southern lights which will -- more compensate and -- will increase the availability of tilt bit. In the middle we've got something -- bit if you don't have enough. Compensate then -- needs to be diluted with something in the largest -- in material available would be synthetic crude oil. That's about a 5050 Blanton. It's ups and -- and -- humans for Gholston bit. And if some of the synthetic securities -- -- -- -- -- no longer available as segregated. Synthetic crude oil. And that's what's showing on -- so even -- we have rise in the production of synthetic crude oil. The availability. Of synthetic doesn't rise -- as quickly because some of it is being diverted. Into the -- heavy crude pool. So what we're trying to do without -- we start with a barrel of eight to ten degree PI and material. It's crude without the and then that. Has to. The turned -- refined products that we in -- that stuff and her. And -- -- automobiles and trucks and suvs. So any refining and upgrading in between. And with upgrading we generally get to a point of having a bottomless. Synthetic crude oil that -- the crew and no vacuum resisted. And -- hit and -- -- further refining. To get to those fuel products. Generally we've been using -- -- technology. To restart the upgrading process but there are alternatives some which are going to be hearing more about the next few days. Evolving -- under cracking. And justification bottoms center. So. When we have a girl -- we can move it to market by diluting it with Billy went with some form. -- we can upgrade it if we -- to light synthetic -- hello. What we're familiar with that's -- bottomless material. But -- possibilities of doing a little less upgrading and having a median salary and a heavy sour synthetic crude oil. And these would all be targeted -- different are types are refineries downstream. They were involved different technologies -- the -- greater. And obviously require different technologies. In it within the refineries that it to make the refined products. We have. The service spectrum if we start with pitch and then we could. Wicked -- all the way to refined products and petrochemicals. That we really wanted to it was a market it and so on but both products would have to move. -- them to the market eventually. The Alberta government in fact is in -- is. And much in favor of maximum value operating in making some of those finished products. Obviously the capital costs would be higher. Price the products presumably would also be higher. But it is typically then we're making the -- -- -- in the middle period of light synthetic crude oil. And in this presentation I'd like to spend a little more time talking about some of the upgraded heavier over medium crews that. That might be made available as an alternative to late that -- The markets we go to. We -- classified them in their current or traditional markets which tended the Canada aren't here. Of the US but there are developing and potential markets for which we need new pipelines are bigger pipelines. And we could and you're pushing product all the way to the Gulf Coast factories send a little bit there today about 70000 girls they. We potentially could go to the East Coast. And I'll talk a little bit more about that market. And we could toward the West Coast -- either forward US consumption in Washington and California. Or -- overseas to northeast Asian. Just a a very quick way of classifying some of those markets were looking here at the size of the market and along the bottom and barrels in the oracle complexity -- left hand side. Which is a measurement of how much. Sophisticated processing H market has. And I won't go through each one in detail but. -- -- -- -- Had one is the East Coast of the United States. The UUS -- in the five pads who -- familiar. A petroleum administration defense district. So pat -- is the East Coast and there's a lot of -- cracking capacity or the import almost all of there grow. And although we can't physically get there today he maybe -- -- market for synthetic crude oil which. Light has a lot of can't feed -- it. California has a lot of complexity. And is importing more crude. And over right we've got southeast Asia where the the capacity of large but the institute the complexity isn't. Quite as great as is North America. And the upper right we've got the Texas Gulf Coast. Which is a huge market can handle this morning -- crude. Indeed they do and a lot of and -- today. And summer quite worried about the availability of an -- out of places like Mexico and Venezuela. So would welcome the opportunity to. Import. Canadian entity -- are available. Probably as long as someone else pays for the pipeline. On the upstream senator talked to much about production -- from the reservoir itself. But some upstream technologies. -- and in place. Upgrading. Either. On purpose or. Or. Just implicitly in the in the reservoir. Because of the eating and so on. Without any upgrading and doing his pages that mention if there's minimum upgrading on site and the do it may be reduced or even eliminated. And that would solve one. Production and supply issues that the -- producers have. The mining extraction. Type of projects. There's one of them the the vast oil sands project that by shell. Rezko LB done uses solvent extraction which is a -- yes folding process. And so they do get a little bit of upgrading going on just by virtue of the yes -- Within six to you can have. Some agreeing due to thermal. -- For thermal processing -- such as the type process. Pay taxes. Solvent yes folding process and other -- solvent flood. -- techniques as well which will also start to lighten up Packard. And our producers could also ought to. Install. Might call partial operators that do a little bit of upgrading. Partly to. Solve this tournament problem. Value creation has its -- -- faulting process and Ivanhoe is developing thermal cracking process -- recently. Purchased some leases which they -- -- to demonstrate the process. That's human blends. Can vary in quality in this scores what the refiners. See. We're showing here the spectrum. Comparing it with my conventional Mexican -- -- To -- -- they're not dissimilar in terms of bottoms. -- WCS the middle left western Canadian select that's a -- of Canadians. Blends heavy -- Sin -- I've mentioned is that there is there and it has a lot our vacuum Castro and which has -- feed. And so refiners using that would. Needed a larger cat cracker either cracker and a smaller Coker compared with those that have used -- bit. So planning among the two isn't as quite a challenge for refiners. The send it says. Does compares somewhat -- heavy in terms of bottoms content but with. Specter's Biggio. Okay.