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Suncor's Oil Sands Project May Include Coke Gasifier to Reduce Gas Use

Calgary-based Suncor Energy Inc. last week asked Alberta regulators to approve its third oil sands upgrader, which would increase the company's production capacity to more than 500,000 bbl/d. As part of the application, Suncor also said it wanted approval to build and operate a petroleum coke gasifier to reduce the company's reliance on natural gas.

The new upgrader, estimated to cost C$5.9 billion, would be constructed southwest from Suncor's existing facilities. The upgrader would include cokers, hydrotreaters, utilities support and a 50-kilometer hot bitumen pipeline to connect with Suncor's in-situ operations.

Adding a petroleum coke gasifier, which would add about C$600 million to the cost of the project, would allow Suncor to process 20% of the upgrader's petroleum coke (a by-product of the upgrading process) into synthetic gas. The synthetic gas would then be used to supply hydrogen and fuel.

"Although this technology is not widely used, Suncor believes it is important to advance energy conservation technologies that reduce reliance on natural gas as a fuel for oil sands development while also creating value from by-products like petroleum coke," CEO Rick George said in a written statement. "As Suncor's plans proceed, the company will work to pursue strategies such as carbon dioxide capture and geological sequestration, which support the environmentally responsible commercial development of this technology."

Gasification is considered the cutting edge for oil sands production in Canada, where production is expected to triple or quadruple to a range of 3-4 million bbl/d over the next decade. As production rises, current technology would triple gas use by the oil sands sector to a range of 1-1.8 Bcf/d. Unless the gas use by the oil sands projects is lowered, Canadian officials warn that gas consumption could absorb all new deliveries planned by the proposed Mackenzie Delta Gas Project.

It will take about two years before regulators make a decision on Suncor's entire project, and construction is not expected to begin before 2007. The proposed upgrader is currently being designed to produce light crude oil. Production from the new facility is expected to be brought on line in phases starting in 2010 with full capacity of approximately 550,000 bbl/d targeted in 2012.

"This is the next step in building on a proven growth strategy," said George. "Filing this application brings us closer to our goal of half a million barrels per day -- more than double our current production capacity." George added that the company wanted to generate financial returns, but also ensure the growth in an "environmentally responsible way."

Suncor would not be the first Canadian company to employ a coke gasification system. In February, the Alberta-based Horizon Oil Sands Project was announced, which would use about 600 cubic feet of gas for each barrel of oil output (see NGI, Feb. 14). The C$3.4 billion Long Lake project, currently under construction by Nexen Energy and OPTI Canada, would produce an initial 70,000 bbl/d, using a synthetic oil upgrader process that would convert the heaviest parts of bitumen from the wells into fuel gas.

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