SPE DISTINGUISHED LECTURER SERIES

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SPE FOUNDATION
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Unlocking the planets heavy oil and bitumen

resources A look at SAGD
Subodh Gupta
EnCana
EnCana Corporation
Corporation
March,
March, 2005
2005

Author wishes to express thanks for Encanas

support and encouragement in allowing to
participate in the Distinguished Lecturer
Program and in putting this presentation
together

A Power Hungry World!

World Population
Billions

Energy Demand
TerraWatts

History

40

Projection

35

30

25

20

15

10

1970

1975

1980

1985

1990

Population

1995

2000

2005

2010

Energy Demand

Source: UN Population Division, Energy Information Administration

2015

2020

Conventional Oil Supply

2015

2007

Source: Duncan and Youngqist, Campbell and Laherrerre

Predictions based on
Hubberts theory suggest
declining conventional oil
supply
Much debate about exact
time of the peak

Plenty of Fossil Fuel!

137.5

60

50

40

30

Additional Occurrences
Resources
Reserves
Used

20

17.17

10

6.14
0.81

3.08

2.163

Methane Hydrates

Coal

Unconventional NG

Conventional NG

Unconventional Oil

Conventional Oil

0
Oil Used

Trillion Barrels of Oil Equivalent

45.78

Source: H. H. Rogner, An Assessment of World Hydrocarbon

Resources, Annual Review of Energy and Environment, 1997.

Total fossil fuel over 100 times

the conventional oil

More unconventional
oil than conventional

Enormous Potential

Heavy oil / bitumen in place

trillion bbls

Canada

1.6

Venezuela

1.2

FSU

0.2 - 2.5

Source: AEUB, CAPP, EIA, AOSTRA, UNITAR

Consequence of being unconventional

Light vs. Heavy

More difficult to
recover
Requires more
downstream
processing

The Downstream Challenge

Gasoline

Upgrading
process
Differential
5 10 $US/bbl

Distillates/Diesel
Resid

How to produce this stuff

The Upstream Challenge

Cost of Production
10
8
6
4
2

Not easy to recover

In situ viscosity

Middle East
Conventional

Canadian Oilsands
Venezuelan Heavy-oil

US$/bbl

12

Canadian Oilsands: > 1e6 cP

Venezuelan Heavy oil: ~3-10e3 cP

Technology and economics

constantly improving
Oilsands context

Source: based on DOE report 2050(draft)

Canadian Oil Sands: Recovery Technologies

Alberta

Athabasca
deposit
213 billion m3

Surface Mining
In Situ
CSS

Fort
Mc Murray
Peace River
deposit
25 billion m3

SAGD
Edmonton

Cold Lake
deposit
32 billion m3

Calgary

Surface Mining

Alberta

Three-Step Process
Mine Oilsands

Athabasca

Fort
Mc Murray
Cold Lake

Edmonton

Calgary

Separate Oil from Sand

Washing with Hot Water

Upgrade the Extracted Oil to

Synthetic Crude

Surface Mining

Alberta

Major projects

Athabasca

Fort
Mc Murray

Cold Lake

Suncors mining operations

Syncrudes mining operations

Athabasca Oil Sands Project

Upcoming

Edmonton

Calgary

Current

Kearl Mine, Horizon, Northern Lights and Fort Hills

Current Production Capacity ~650kbd

Announced projects to increase to >1million b/d in 10 years

Issues to consider

Economics is location (depth < 75m) dependent

Only 5 to 10% reserves suitable

Scale of economy requires huge capital

In Situ Processes

Cyclic Steam Stimulation

steam

oil + water

combus
tion
zone

combus
tion
zone

combus
tion
Major projects/operators
zone

Cold Lake - Imperial

Primrose CNRL

Advantage

Lower surface disturbance

Less sensitive to shale barriers

Issues to consider

Recovery ~25-30%

In Situ Processes

Steam Assisted Gravity Drainage (SAGD)

Advantage
Lower surface disturbance
Lower SOR : 2.5 to 3.5
Economic recoveries ~ 65%
Modular capital requirements

SAGD
Current and upcoming projects tell the story

Current Major Projects

Foster Creek (Encana)

Christina Lake (Encana)

Mackay River (PetroCanada)

Firebag (Suncor)

Primrose/Wolflake (CNRL)

Hangingstone (JACOS)

Upcoming Projects

Joslyn Creek (Deer Creek)

Surmont (ConocoPhillips/TFE)

Long Lake (Nexen/OPTI)

Tucker Lake (Husky)

Sunrise (Husky)

Jackfish (Devon Energy)

Orion (BlackRock)

SAGD Production x1000 b/d

600
500
400
300
200
100
2004

2007/2008

Source: based on DOB, Jan. 2005, ADOE

SAGD

Current Issues?
SAGD requires steam
steam = fuel and water

Energy efficiency (GJ/bbl)

Heat is an expensive input

Water usage
Water recycle adds to the cost

Emissions

SAGD

It costs to heat

Bitumen/Residue to substitute Gas

Nexen/OPTI

Other talked-about alternatives

Heavyoil/Coke/Coal/Nuclear

Surface

Use cheaper fuel

Cost of Heat

Reduce heat requirement

Process Improvement
(Also reduces water requirement)

Low Pressure Operation

Use of Solvents

SAP ( SAGD + solvent )

Sub-surface

Reduction in

Low Pressure SAGD Operation

Effect of Pressure
on
SOR
and Rate
Effect of Pressure
on SOR
and Rate
25m x 7D reservoir

25mx7D reservoir

0.7

0.6

0.5

CSOR

0.4

CSOR
rate m3/d/m

0.3

1
0.2

rate m3/d/m

Issues
artificial lift

0.1

0
100

1000
pressure kPa abs.

Source: Edmunds and Chhina, JCPT, Dec. 2001

0
10000

role of solution gas

What role can solvents play? ..SAP

Solvent Aided Process

Steam +Solvent
Injection
Well

Enhanced Gravity Drainage in SAP

steam +
solvent

condensed
solvent + oil
+ water

2 . . S o .K . g . .h
m . S

Expected Production with Combining

Solvent with SAGD
700
600

sagd oil rate

sap oil rate

oil rates

500
400
300
200
100
0
0

200

400

600

800

time

1000

1200

1400

Expected SAP Benefits (example)

SAGD

SAP

1.4

SOR

Recovery

Lower Capital Intensity

Lower Emissions

Less Water Usage

Possible In Situ Upgrading

65%

(as high as)

90%

Lloydminster
Edmonton

Senlac

Encanas Senlac SAP Pilot 2001-2002

Senlac Thermal Facility Phase C

To assess
Calgary
Alberta

Rate enhancement
Saskatchewan

Solvent retention
In situ upgrading

Senlac SAP Test

SAP Pilot at Senlac - C1P Performance
600

SAGD SAP
daily production
500

daily average production

300

200

expected production with SAGD

100

date

Jun-02

May-02

Apr-02

Mar-02

Feb-02

Jan-02

Dec-01

Nov-01

Oct-01

Sep-01

Aug-01

Jul-01

0
Jun-01

oil rates m3/d

400

Senlac Pilot, 2001-2002

Butane used as solvent

Oil rate increase of over 50%

Test cut short due to reservoir

containment issue

Senlac SAP Test

Senlac Pilot, 2001-2002

Butane used as solvent

Oil rate increase of over 50%

Test cut short due to reservoir

containment issue

approx. upgrading: 10 API

In Situ Deasphalting
15

13

C1 API
C1 asphaltenes

12
11
10
9

8
7
6

date

20-Aug-02

01-Jul-02

12-May-02

23-Mar-02

5
01-Feb-02

C5-insoluble asphaltenes (w /w % ), API gravity

14

(over base level 12.70 API)

Senlac SAP Test

Solvent Injection and Recovery

25000

80
70

20000
60
50

15000

40
10000

30
20

5000
10
0

date

30-M ar-03

08-F eb-03

20-D ec -02

3 1 - O c t- 0 2

11-S ep-02

2 3 - J u l- 0 2

03-J un-02

14-Apr-02

23-F eb-02

04-J an-02

s o lv e n t r e c o v e r y %

cumulative C4 % recovery

15-N ov -01

c u m u la tiv e in je c te d s o lv e n t, m 3

cum c4 inj m3

Senlac Pilot, 2001-2002

Butane used as solvent

Oil rate increase of over 50%

Test cut short due to reservoir

containment issue

approx. upgrading: 10 API

(over base level 12.70 API)

Over 70% solvent recovery

Encanas Christina Lake SAP Test

Christina Lake SAP Pilot, 2004-2007

Prove (Athabasca context)

rate acceleration
solvent retention
In situ upgrading

Fort McMurray
Christina Lake

Edmonton

Calgary

Pilot started July 2004

SAGD and beyond

Energy/bbl

In situ Processes and Energy Efficiency

SAGD

Commercial

SAP

VAPEX,
IC

Under development

Solvent without steam - VAPEX

solvent
vapor

Prospects
Minimal energy
requirement

condensed
solvent + oil

No water recycle issue

Some downhole upgrading

Awaiting field scale demo

Several efforts to field test in oilsands:

Encanas Foster Creek VAPEX Pilot

Consortium DOVAP

SunCors ETS

SAGD and beyond

Energy/bbl

In situ Processes and Energy Efficiency

SAGD

Commercial

SAP

VAPEX,
IC

Under development

SAGD

It costs to heat

Bitumen/Residue to substitute Gas

Nexen/OPTI

Other talked-about alternatives

Coke/Coal/Nuclear

Surface

Use cheaper fuel

Cost of Heat

Reduce heat requirement

Process Improvement
(Also reduces water requirement)

Low Pressure Operation

Use of Solvents

SAP ( SAGD + solvent )

Sub-surface

Reduction in

Cheaper Fuel
Product oil

Primary
Upgrading

Fuel

Fuel + H2

Residue
Gasification

Sub-surface

Thermal Recovery

Surface

Steam
Generation

Secondary
Upgrading
H2

Air

Cheaper Fuel
Air

Product oil

Heat

Residue
Combustion

Sub-surface

Thermal Recovery

Surface

Steam
Generation

Primary
Upgrading

Everything in the Reservoir ?

Imagine that!

Surface

Air

Product oil

Primary
Upgrading
Steam
Generation

Heat

Thermal Recovery

Sub-surface

Residue
Combustion

The prized pursuit ..

In Situ Combustion
Air/Oxygen/Water

Oil/Gases

mobile oil bank

condensation zone
air/water zone
coke zone
combustion zone

In theory this is great!

minimal fuel requirement
high recoveries
no reservoir loss of pricier
substance

toe

heel

The prized pursuit ..

In Situ Combustion
Air/Oxygen/Water

Air/Oxygen/Water

Oil/Gases

Oil/Gases

mobile oil bank

condensation zone
air/water zone
coke zone
combustion zone

In theory this is great!

minimal fuel requirement
high recoveries
no reservoir loss of pricier
substance

toe

heel

Petrobanks Whitesands 3-wells Pilot

Location: South of Ft. McMurray

Time-frame: 2005-2008

Proponents expect a $6/bbl cost

reduction

Source: based on Petrobank website information, Fort McMurray Today

To recap ..

World demand for energy in the near future will grow

Although the conventional oil supply is predicted to
decrease, non-conventional economic oil sources are
ready to step up and fill the gap
SAGD is emerging to be the technology of choice for
the expanding exploitation of Oilsands of Alberta
Energy efficiency and economics of SAGD will
significantly improve through steps such as SAP.
Dramatic improvement in recovery process are
expected if VAPEX or In Situ Combustion prove
successful
We live in exciting times to witness and be a part of a
revolution in the Energy Technology!