Alberta Innovates and Natural Resources Canada announce $26.2M in funding for oil and gas clean tech projects, industry to kick in additional $43.3M

CALGARY, ALBERTA--(Marketwired - May 11, 2017) - Demonstrating the strength of collaboration, Alberta Innovates has teamed up with Natural Resources (NRCan) and industry partners to take three clean oil and gas technologies to commercial demonstration.

This announcement is a result of NRCan's Oil and Gas Clean Tech Program. NRCan is contributing $21 million and Alberta Innovates is investing $5.2 million, for a total of $26.2 million over two-years to support clean oil and gas technologies to help develop Canada's hydrocarbon resources in sustainable ways.

Accelerating these technologies will be a key component to making Alberta's oil and gas economy more competitive, creating jobs and supporting Alberta's transition toward a low-carbon economy.

The three industry partners, Cenovus Energy, Field Upgrading, and MEG Energy are investing $43.3 million in commercial demonstration.

QUOTES:

"We're focused on projects that add value to Alberta's economy. Today's announcement represents the potential for billions of dollars of economic impact and the reduction of millions of tonnes of GHG emissions once these projects reach commercialization. AI is proud to be part of this partnership and we were happy to provide the knowledge and expertise in this space to support NRCan in selecting these high impact projects."

Laura Kilcrease, CEO, Alberta Innovates.

"Alberta is the energy and environmental leader the world needs for the 21st century. That's why we are working with the federal government and industry to find new ways to lower carbon emissions and operating costs in our oil-and-gas sector. Together we are building a more diversified and resilient economy for the future -- and making life better for Albertans."

Deron Bilous, Minister, Alberta Economic Development and Trade.

"Canada's oil sands companies are constantly evolving and innovating. Developing and adopting clean technologies creates jobs and will help Canada increase its global competitiveness for years to come."

Jim Carr, Canada's Minister of Natural Resources.

About Alberta Innovates

Alberta Innovates will deliver 21st century solutions to the most compelling challenges faced by Albertans. Building on our province's strengths in environment, energy, health, food, fibre and emerging technology sectors, we will work with our partners to diversify our economy, improve environmental performance and enhance our well-being. Alberta Innovates delivers the kind of cross-sectoral support and leadership that Alberta's world-class researchers, entrepreneurs and industry innovators need to thrive in a globally competitive research and innovation context. Services, tools, expertise, partnerships and funding from Alberta Innovates support a broad range of research and innovation activity, from discovery to application, with a focus on accelerating commercial outcomes. Find out more at http://albertainnovates.ca.

Backgrounder: Project summaries

Cenovus Energy: Solvent Driven Process Field Demonstration

• Alberta Innovates: $2,000,000
• NRCan: $7,525,000

MEG Energy: eMVAPEX

Funding:

• Alberta Innovates: $2,300,000
• NRCan: $9,933,000

Field Upgrading: DSU DBM and FEED Study

Funding:

• Alberta Innovates: $971,000
• NRCan: $3,560,000

Cenovus Energy: Solvent Driven Process Field Demonstration

The proposed demonstration project will test an oil sands extraction technology using a solvent-driven process. This involves co-injecting solvent together with steam into a well at Cenovus's Foster Creek project after approximately one to two years of steam-assisted gravity drainage (SAGD). Unlike in previous solvent pilots conducted by Cenovus, the majority of the steam-solvent mix in this demonstration project will be solvent (between 50 and 95 per cent by weight). The steam will heat the solvent to about 80-100° C, and the heat and solvent are expected to sustain steam chamber growth in the reservoir. Among other things, the demonstration project will evaluate the reduction in steam requirements with the goal to develop a technology that can potentially significantly lower the cumulative steam-to-oil ratio and water treatment costs associated with steam generation.

MEG Energy: enhanced Modified VAPour Extraction

The main objectives of the enhanced Modified VAPour Extraction (eMVAPEX) technology are to efficiently grow MEG's bitumen production rate, achieve sustainable cost savings and minimize environmental impacts to land, air and water. It is anticipated that by employing eMVAPEX, the bitumen production rate and overall bitumen recovery will increase relative to the SAGD process while requiring significantly less steam injection. As eMVAPEX requires less steam per barrel of oil, MEG is projecting an approximately 43 per cent reduction in GHG emissions relative to the industry average as well as a significant reduction in water usage. The efficiency gain in steam deployment will allow MEG to redeploy existing steam generation capacity to new patterns, further increasing bitumen production and reducing the overall per barrel footprint and cost of bitumen production.

MEG targets annual production of 80,000-82,000 barrels per day in 2017. Steam generation is the main contributor to GHG emissions and the operating cost of bitumen production. eMVAPEX involves injection of a light hydrocarbon instead of steam after initial SAGD operation when bitumen recovery reaches between 20-30 per cent. It is anticipated that by employing eMVAPEX, overall plant bitumen production could be increased by up to 70 per cent with the same steam assets employed for SAGD bitumen production. The overall GHG emission intensity is expected to be reduced by as much as 43 per cent for industry standard assets at 3.0 SOR, as well as improving the overall recovery from the reservoir.

Field Upgrading: Clean Seas Demonstration Project

The objective of this project is to advance Field Upgrading's (DSU™) technology by completing a Front-end Engineering Design (FEED) study for a first of its kind modular large scale 2500 barrels per day (Bpd) demonstration plant.

DSU™ technology removes sulphur and metals from heavy oils and refinery bottoms to produce a marine fuel that complies with the lower ISO sulphur specifications s for marine fuel. DSU technology is more energy efficient than conventional technologies, has no direct SO_x, NO_x, PM or GHG emissions, and does not leave coke or asphaltenes behind.

The DSU™ technology has been extensively proven in the lab and at pilot scale, with an operating 10 Bpd pilot plant, across over 30 different feedstocks from Alberta bitumen and refinery bottoms to Columbia heavy oils with consistent positive results.

This FEED study will be a building block for a full-scale commercial plant. An important advantage of the DSU™ process is its scalability. An objective of the project will be to package the commercial plant into sea container-size skids that can be prefabricated and delivered to site to speed rollout of the technology and minimize low-productivity work in the field.