Oilweek Magazine – Partial Upgrading Plans Target Bunker Fuel Market

September 1, 2016

A bitumen upgrading pilot project near Fort Saskatchewan, Alta., has found a potentially lucrative business model lurking at the bottom of a barrel of heavy oil.

“We’re bottom feeders. We like heavy oil that’s stuffed with sulphur, so bitumen or other heavy oil like that. We take the dirty out of the dirty oil,” said Neil Camarta, president and chief executive officer of Field Upgrading Ltd., which officially launched its pilot plant in June.

The 10-bbl/d pilot cost $30 million: $9 million coming from the Climate Change and Emissions Management Corporation, $5 million from Sustainable Development Technology Canada, $500,000 from Alberta Innovates—Energy and Environmental Solutions and the remainder from private investors.

Field Upgrading’s process works with any high-sulphur feedstock, such as bitumen or vacuum resid. The feed reacts with sodium, creating sodium sulphide and precipitating out heavy metals like vanadium and nickel. The upgraded oil that comes out of the process is eight to 10 degrees API lighter.

“The minute you throw in some sodium, the sulphur gets attracted to the sodium molecules and the rest of the oil is upgraded on the spot. It’s quite simple,” explained Guy Turcotte, chairman of Field Upgrading.

However, the key to the process is recovering the sodium. The sodium sulphide is dissolved into a solvent in a ceramic membrane reactor produced by U.S.-based Ceramatec Inc. When electricity is applied, the sodium sulphide breaks down into sodium, which is returned to the beginning of the process, and liquid sulphur, which can be sold on the market.

“It’s very efficient. We recover all of the sodium,” Turcotte said, adding that there are no waste by-products from the process.

It also produces no direct greenhouse gas emissions. The only emissions from the plant are those tied to the electricity used during the sodium sulphide separation process. As a result, the process uses less than 50 per cent of the energy required by conventional upgrading technology, Turcotte estimates.

The lower energy requirements naturally lead to lower operational costs, but the process is expected to allow for considerably reduced capital costs as well. The entire facility can be produced modularly. Future plants would be broken down into 2,500-bbl/d segments consisting of 10 process skids each.

“We can do this on a much smaller scale and without the construction execution risk of these very large projects,” Turcotte said. “That’s what got us initially really interested in this, and now we’ve been able to confirm that it does work.”

Camarta has set his sights on a very specific market for the upgraded bitumen: bunker fuel for marine transport. He noted that the seaborne shipping industry burns four million bbls/d of tar, but it now faces

pressure to lower the sulphur content of its regular fuel. Field Upgrading would send its output to coastal ports by rail for use in that industry.

“We were going to dump it in a pipeline like everyone else, but this is the smarter way to go. Sell it directly to those shipping people,” Camarta says. “There’s more money in that than just dumping it into a pipeline.”

Construction on the plant began early last year, and operations started up in December. So far, the facility has run through bitumen from both the Athabasca and Cold Lake oilsands. The company has also successfully tested vacuum resid from the Alaska North Slope.

“I must be the only guy importing heavy oil into Alberta, but we had to get bottoms from somewhere,” Camarta said. “And it runs beautifully. [The process] makes it lighter, makes it easier to flow, and takes all the nasty stuff out of it.”

Camarta estimated the next 2,500-bbl/d phase of the project will cost around $75 million. Front-end engineering and design work is underway to begin site work before the end of next year.

The current plan is to have a fully commercial 10,000-bbl/d plant operational by late 2019 or early 2020, according to Turcotte.

Written By Joseph Caouette