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Jul-2011

Bitumen processing: crude unit revamps

The ability to process bitumen offers a competitive advantage, but revamps of crude and vacuum units to process bitumen require significant changes
to equipment

Mike Armstrong, Rob Henderson and Jon Moretta
Jacobs Consultancy
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Article Summary
Canada is now the largest supplier of imported crude oil to the US and currently provides approximately 10% of crude refined in the country. A significant portion of this crude is derived from heavy oil sands bitumen produced in Alberta and primarily processed in the Midwest.

Western Canada’s plans for growth in oil sands development, coupled with numerous pipeline expansion projects, will make bitumen more readily available to refiners not only in the Gulf Coast and other regions in the US, but also in other parts of the world. Simultaneously, similar heavy crudes are being produced in Venezuela, the Middle East and elsewhere. The flexibility to process heavy crude can provide a significant competitive advantage by reducing feedstock costs.

The ability to process heavier crudes has been a refining trend since the earliest facilities were built. Refiners worldwide have been driven to upgrade their facilities over time to handle heavier crudes because of the following trends:
• New sources of crudes are predominantly heavier crudes with increased sulphur content
• Existing sources become heavier as they pass their peak production rates
• Light-heavy crude pricing spreads generally increase with crude price
• Canadian bitumen represents one of the largest potential future sources of petroleum in North America and is undoubtedly the most secure supply available to US refiners
• The next largest potential volume of material is from heavy Venezuelan crudes, which are similar to Canadian bitumen
• With US refineries running at lower utilisation levels, many refineries have the cracking capacity to increase heavy oil processing, if primary distillation units are properly equipped to handle these feeds.

Modifying a refinery to process heavy crudes typically involves modification to primary crude and vacuum distillation units, additional gas oil and residue conversion capacity, increased hydrotreating and sulphur capability, and other supporting changes to off-sites, utilities and infrastructure.

While many refineries are already geared up to process heavy crudes, the inherent quality of bitumen coupled with recent trends in 
bitumen production and supply present unique processing challenges. This article discusses these trends and challenges, with specific focus on the revamp and reliability of crude distillation units. While the article focuses on processing Canadian bitumen, many of the challenges discussed are similar for other heavy crudes.

Bitumen production and supply trends
Figure 1 depicts a potential growth case for Western Canadian oil sands developed by the Canadian Association of Petroleum Producers (CAPP). Canada currently produces approximately 1.5 million b/d of oil sands-derived crude oil. A significant portion of this material is currently upgraded and exported to the US as lighter synthetic crude oil.

Oil sands production could grow to as much as 4 million b/d by 2025. The majority of this new capacity is expected to be supplied as bitumen blend instead of upgraded light synthetic crude oil. Light diluent and synthetic crude oil will be used as blendstock to transport this bitumen to the US.

Bitumen is produced via two primary methods: thermal in situ recovery using steam and mining, and extraction of bitumen from oil sands. Current production capacity is roughly split at 50% thermal recovery and 50% mining, and this trend is expected to continue. Most of the mined bitumen currently produced is being upgraded directly in Alberta. At the moment, bitumen supplied to the US is primarily derived from thermal recovery facilities. However, going forward, a significant portion of new bitumen supply may be sourced from mining production operations.

Due to these new production and supply trends, extra diligence is required by refiners to address issues such as potential increases in chloride and solids levels in the bitumen, as well as the choice, management and processing of various diluents.

Bitumen sources, blends and properties
Sources

The term oil sands refers to heavy bitumen deposits co-mingled with rocks and sand relatively near the surface. At ambient conditions, the bitumen is effectively solid and cannot be pumped or recovered using standard crude oil well methods. For the purposes of this article, oil sands and bitumen are used interchangeably and refer solely to Alberta bitumen reserves.

As with any fossil fuel, bitumen properties vary from site to site. Oil sands-produced bitumen properties are further impacted by the production method. While several theoretical and experimental methods of extraction are being studied and piloted, the primary commercial methods of production are through mining or thermal methods, such as steam-assisted gravity drainage (SAGD).

Mined bitumen is produced in a similar fashion to strip-mined coal. Mined sand interspersed with hydrocarbon is mixed with water and then a light hydrocarbon, to separate minerals and water-soluble material from the hydrocarbon.

For deeper reserves, where mining is not currently feasible, thermal production methods are used. The most widely used thermal technology in Alberta is SAGD, in which steam is injected into the reservoir via one set of horizontally laid pipes. The steam heats the bitumen, reducing its viscosity and allowing the oil to settle or gravity drain to a low point in the reservoir. The accumulated oil can then be piped from there to the surface. SAGD-produced bitumen tends to have lower concentrations of chlorides, clays and other solids than mined bitumen.
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