Distingushed Lecturer for the 2001/02 Season, Mr. Keith Firmin, Manager, Procurement and Contracts, Athabasca Oil Sands Project, Shell Canada, spoke on his company's Muskeg River Mine Development to a joint session of the Ottawa Branch of the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) and the Ottawa Section, Petroleum Society of CIM. The presentation outlined the challenges facing Shell Canada and its partners in developing the new oil sands mining project at Muskeg River near Fort McMurray, the related upgrader located separately at the Scotford refinery just north of Edmonton, and the Corridor Pipeline which connects them. Construction began in May of 2000 on the project which involves the construction of a very large mine and bitumen extraction process at the site north of Fort McMurray, two pipelines to the refinery in the Edmonton region, and the bitumen upgrader and related factilities being installed in the refinery. Shell joined with partners Chevron and the Western Oil Sands Company on this very large project whose total cost is now placed at $6.5 billion. Design output is 190,000 barrels of synthetic crude per day with the first output expected in late 2002.

The Shell-led project differs from other oils sands mining operations in a number of important respects. It is a joint venture with the three companies and some of the facilities – the pipelines to Edmonton and the two co-generation facilities – are owned and operated by others. Mining is by truck and shovel only using very large equipment. Though the Syncrude-developed hydrotransport system (about 2 km in length) is being used to move the mined sands to the processing site, an improved process for the separation of the bitumen from the sand has been developed by the company. The separated bitumen is blended with light hydrocarbons to reduce the viscosity sufficiently for allow transport by pipelines that account for $600 million of the investment the 600 km to Edmonton. The recovered light hydrocarbons returned north in a second pipeline. No coking processes are used as at the other producers - the bitumen is upgraded only by treatment with hydrogen in the refinery which, while it has been in operation for some years, was originally designed to accommodate the upgrading of bitumen.

Mt Firmin focused on the mine development and the bitumen separation aspects of this major undertaking, stressing the very large quantities to be moved in both the mining and extraction processes. The trucks, for example, can carry 400 tonnes each and cost $5 million per unit. He explained that the parafinic treatment of the froth was the key enabling technology that allowed caustic-free operation at lower temperatures than other such plants. At the time of the presentation, the project was about 75% complete with some 10,000 people involved in one way or another on the project including 500 engineers at the peak. About 93,000 barrels per day will be further refined at the Scotford refinery, 30,000 bpd at the Shell refinery in Sarnia, and 67,000 bpd to Chevron and third parties.

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The source of the carbon dioxide is from a coal gasification plant in Beulah, North Dakota, where it must be separated from the process streams in any case. A pipeline has been built to move the gas to Weyburn which could be modified to serve other such activities in the oil industry in the future. The company investigated other sources for carbon dioxide such as from a major power plant not too far distant from this mature oil field and from other sources in Alberta, but these proved more costly. Advances in CO2 separation technology, or by burning coal in oxygen may change this situation at some later time.

The project will form an activity of the IEA Greenhouse Gas R and D Programme because of its importance in the possible sequestering of large quantities of carbon dioxide. Its large scale, the availability of cores from extensive drilling over the years, and the fact that no such enhanced technique has previously been applied before make it an ideal choice of this international activity.

Mr. Don Downing, retiring President of The Coal Association of Canada, spoke on The Future for Coal after Kyoto. He reviewed the development of the industry in Canada and noted that production had reached a new high in production of 78.7 million tonnes in 1997. Exports were 36.5 million tonnes to some 21 countries around the world. Recent softening in markets, particularly in the Asian countries, has put pressure on prices. The industry has now reached a high level of productivity since a high proportion of the coal is produced from surface mines.

Mr. Downing reviewed the consequences of the November 1997 Kyoto Protocol for the industry stating that it was the main challenge for the future. He called upon Canada to join international research efforts to find solutions to this problem noting recent U.S. initiatives, particularly the Vision 21 project of the U.S. Department of Energy.

Gas hydrates are ice-like materials in which gas molecules are contained within a crystalline framework of water molecules. Because of the arrangement of the gas molecules within this framework, gas hydrates can store over 160 times more gas per unit volume than free gas. Although worldwide estimates vary considerably, gas hydrates undoubtedly represent a huge reservoir of natural gas. Because of their inherent instability when disturbed, gas hydrates have long been recognized as a geohazard to hydrocarbon exploration. However, in recent years serious consideration has been given to their economic potential as well as their possible role as a source of greenhouse gas emissions.

Over the past five years, the Geological Survey of Canada has carried out an intensive research project in northern Canada to evaluate Arctic gas hydrates. Mr. Dallimore's presentation provided a general overview of recent development in the field of natural gas hydrates, including recent international interest in their commercial exploitation.