Natural gas byproducts now being processed at a nearby plant in Alberta for Shell Canada Ltd.’s refinery have reduced greenhouse gas (GHG) emissions and given the company a competitive edge, officials said last week.

Aux Sable Canada (ASC) agreed last year to process Shell’s off-gas from its Scotford refinery and upgrader at the Heartland Off-gas Plant (HOP), a 20 MMcf/d processor that’s northeast of Edmonton in Fort Saskatchewan. HOP takes the off-gas and produces hydrogen, ethane, propane-plus mix and residue gas, which then are returned to Shell through new pipelines sized to accommodate additional future volumes.

ASC was the first company in Alberta to extract ethane and hydrogen from an upgrader or refinery off-gas stream, but officials said off-gas likely will become an ever-larger source for new feedstock supply in Alberta as oilsands and petrochemical industries expand.

“We’re very proud to be the first in Alberta to do this,” said ASC President Tim Stauft. “We’re both removing valuable liquids from the off-gas and reducing the GHGs that were previously emitted.”

Over the past year carbon dioxide (CO2) emissions from the Scotford facility have dropped by 125,000 tons, which is “equal to taking about 25,000 cars off the road,” said Scotford Manufacturing General Manager Barry Klein. That kind of “positive environmental impact” is possible every year. The innovative approach has “not only helped us to considerably reduce our CO2 footprint, but it’s also a big competitive advantage for Shell.

“This project made a lot of sense from an environmental perspective, but it actually makes money for the companies involved and provides employment in the region…”

Given that energy demand is forecast increase in the coming years, “finding new and innovative solutions to reduce emissions is an important part of Shell’s CO2 strategy,” officials said. Shell now is considering the possibility of sending some of the off-gas from an adjacent bitumen upgrader project for processing.

“This is what makes this type of partnership so important,” said Klein. “We are always looking to make improvements to our operations, and this project only inspires us to look for new ways to become more efficient.”

The Shell/Aux Sable deal follows one announced late last month by Williams’ Canadian subsidiary, which plans to process off-gas from the Horizon Oil Sands facility for Canadian Natural Resources Ltd. (CNR), which said last week it was the Williams customer (see NGI, Oct. 1). Williams, which also processes off-gas for oilsands giant Suncor Energy, last year added a second oilsands upgrader to its off-gas processing network in the Fort McMurray region to support an agreement with Nova Chemicals Corp. (see NGI, April 4, 2011).

Oilsands off-gas NGL production only represented 1% of Canada’s total NGL output in 2009 but it is expected to increase in the future, according to the National Energy Board’s (NEB) most recent energy market assessment, which provided projections on the country’s energy future to 2035. “Refineries account for only about 6% of total NGL production,” NEB said. “However, they contribute a larger share of propane and butanes production, accounting for approximately 11% and 19% of propane and butanes production, respectively.

The NEB also is forecasting natural gas requirements for the oilsands industry to increase to 1.4-1.6 Bcf/d in 2015 from 0.6 Bcf/d in 2003. The independent Canadian Energy Research Institute earlier this year also projected gas use in Alberta’s oilsands would increase an estimated 167% to 3.2 Bcf/d within 20 years (see NGI, April 2).

In September Shell said it would proceed with the Quest project, the first carbon capture and storage facility specifically for Alberta’s oilsands operations. The facility is to serve the Athabasca Oil Sands Project on behalf of Shell’s partners Chevron Corp. and Marathon Oil Corp. Quest, thought it is not connected to the ASC project, is expected to reduce CO2 emissions from the Scotford upgrader by 1 million tons a year. It is scheduled to begin injecting CO2 for permanent storage by late 2015.

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