Upgrader updater

March 28, 2005
Ask and ye shall receive.

Ask and ye shall receive.

This one is for the reader who called in requesting information on heavy oil upgrading facilities.

Technically speaking, any refinery with coking capacity is an upgrader. The interest here is in facilities meant to upgrade heavy oil or oil sands from bitumen into lighter oil that can be sent to refineries for processing.

Much, in fact, is happening with upgraders of this type-including completion of tests of a new upgrading technology.

The resource

Heavy oil deposits are found in Russia, Romania, Albania, Trinidad and Tobago, and the US, but significant development so far is confined to Canadian oil sands and Orinoco heavy oil in Venezuela.

Concern about future supply of conventional oil has attracted new attention to the potential yield from these resources (OGJ, July 28, 2003, p. 20). Production by mining and thermal methods is increasing as companies lower costs with ever-improving technology (OGJ, June 7, 2004, p. 43). And the general media have taken note. Canada’s C21ETV Inc. has produced a documentary, “Walking On Oil-Alberta’s Oil Sands,” written by George Angelescu and focusing on the 1.6 trillion bbl of crude bitumen estimated to be in place in the province.


According to Maurice Dusseault, professor at the University of Waterloo, Ont., recent work at the pilot-plant scale indicate costs of upgrading heavy oil soon may decline to as low as $3/bbl from about $5/bbl. He cites advances in the understanding of asphaltene solubility effects at high temperatures, in catalyst technology, and in hydrogen-addition and carbon-rejection methods.

Because of the improved economics, a list of upgraders compiled in response the reader’s request for information includes many newbuilds and planned expansions (see table).

One Canadian upgrader project recently has been canceled, however. Imperial Oil Ltd.’s Kearl mining project no longer includes plans for on-site upgrading.

And technology isn’t the only factor in upgrading economics. In Venezuela, officials with the Venezuelan Ministry of Energy and Mines held meetings with representatives from the Cerro Negro upgrading joint venture to discuss a royalty rate hike to 16% from 1%. ExxonMobil Corp., the main private partner and a 41.6% interest holder in the venture, objected.

New technology

In the US, Ivanhoe Energy Inc. recently completed tests of a new type of heavy-oil upgrader based on technology developed by Ensyn Petroleum International Ltd.

Based on results at a demonstration plant in Belridge heavy oil field in Kern County, Calif., Ivanhoe, of Vancouver, BC, will proceed with its acquisition of Ensyn (OGJ, Jan. 24, 2005, p. 36). Ivanhoe said the facility, not listed in the table, demonstrated its overall processing capacity of 1,000 b/d by operating a section that uses Ensyn’s technology at its capacity of 300 b/d. The company plans to continue testing heavy crudes at the plant.

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After the initial test, Ivanhoe and Ensyn let contract to Colt Engineering Corp., Calgary, to design commercial modules with capacities to process 10,000-15,000 b/d of heavy crude. Ivanhoe Pres. and CEO Leon Daniel said the Belridge test results “will provide the platform for Ivanhoe Energy’s acquisition and development of equity interests in heavy oil reserves and production worldwide.”