Canada’s chief fossil fuel producer province has moved closer to fulfilling ambitions of winning a role in the forecast North American petrochemical renaissance, thanks to an Oklahoma specialty firm in gas processing and transportation.
Williams Energy Canada, a regional arm of Williams Cos. in Tulsa, carried Alberta a step ahead by starting up its second liquids byproducts extraction plant deep inside the oil sands district, about a 10-hour drive northeast of the industry capital of Calgary.
The site extracts 15,000 b/d of ethane, propane, butane, propylene and other liquids from “off gas” wet vapor discharged by the synthetic oil upgrader in Canadian Natural Resources Ltd.’s Horizon 130,000 b/d bitumen mine.
The first Williams oil sands off-gas plant, linked to Suncor Energy’s 350,000 b/d bitumen mega-mine, proved that the industrial symbiosis works by extracting 25,000 b/d of the light liquids byproducts.
A Williams oil sands region pipeline, named Boreal after the continent-spanning forest that covers the northern Alberta bitumen belt, delivers the off-gas brew to a purification plant that the Oklahoma firm has at Redwater, near the provincial capital of Edmonton.
Growth plans that Williams and Goradia Capital have been gestating for about three years include propylene, plastic pellets and heat-and-power cogeneration additions to the Redwater site. A construction plan is locally believed to be coming soon, although the project owners only promise to go ahead if and when market conditions are right.
In Alberta, the proposed Williams project chain stands out as a stellar example of diversification ambitions that have a pedigree in provincial economic policy stretching back to the early 1970s. The objective, set in various versions by leaders of all political stripes, is a more value-added, stable, job creating and tax generating industrial base than the province’s traditional heavy reliance on exporting raw oil and natural gas.
The novice New Democratic Party provincial government has added an environmental target of reducing oil sands greenhouse gas emissions. Williams obliges. Its plants give the bitumen mines an economic reason to stop burning their off-gas vapors as process fuel and substitute cleaner-burning natural gas.
Williams forecasts that its current pair of oil sands off-gas plants will cut greenhouse gas emissions by 500,000 tons per year, and that the total environmental gain would be one million tons if all Alberta bitumen upgrader sites had liquids extraction partners. The two off-gas operations will also cut acid rain-causing sulphur dioxide emissions by 5,500 tons per year, the Tulsa firm predicts.
Williams stands out as a charter member of the Alberta Resource Diversification Council, which formed officially last week to promote the provincial economic agenda. The group is a non-profit alliance of processing, refining and petrochemical firms with the Alberta Building Trades Council, a coalition of craft unions such as welders, electricians and millwrights that participate in industrial construction projects.
Provincial Environment Minister Shannon Phillips and Fort McKay First Nation, an aboriginal community in the oil sands mining district, praised Williams as the second off-gas liquids extraction site started operations this week.
“We applaud Williams Energy Canada for their efforts to reduce greenhouse gas emissions, add value to our resources and create good jobs here in Alberta,” said Phillips. Fort McKay added, “The First Nation appreciates that the Williams facility is expected to have a positive impact on the local air shed by reducing carbon and sulphur dioxide emissions.”
The NDP regime is also walking the combined economic diversification and environmental cleanup talk. In February the government posted a C$500 million (US$350 million) reward for natural gas producers to co-operate with additions to petrochemical complexes in the province.
Known as the PDP, short for petrochemicals diversification program, the scheme donates credits against future provincial gas and byproducts royalties to project sponsors. The petrochemical companies turn the credits over to gas producers in exchange for raw material commitments.
The arrangement is intended to enable negotiation of long supply contracts, potentially with built-in price discounts. Petrochemical projects will qualify for the aid by going through a competitive bid process. Provincial Economic Development Minister Deren Bilous has estimated the program could support two or three projects, worth C$3-$5 billion (US$2.1-$3.5 billion) and creating more than 1,000 permanent plant operating jobs.