Sherritt International completed a successful laboratory test of a product with the potential to significantly impact Alberta’s oil sands – and save producers a lot of money. The Toronto-based company, best known for its cobalt and nickel refining operations in Cuba and Madagascar, unveiled earlier this month a proprietary bitumen-upgrading process that could effectively eliminate the need for diluent, a high-cost thinning solution currently used to transport oil. “Right now, the industry spends about $6 billion per year on diluent,” explained David Pathe, Sherritt’s CEO. “We developed a process to upgrade that bitumen and eliminate that need while improving the quality of the oil.”
If successful, the product has the potential to be a game-changer for big companies operating in Western Canada’s oil sands industry, increasing export capacity without sacrificing quality or environmental sustainability.
“If it is what we believe it is capable of being, it does have the ability to make the Western Canadian bitumen product more accessible, more transportable and that’s a real priority for the Alberta government and for the country as we look at increasing pipeline capacity,” said Pathe. “We’d like to see this make a significant contribution to that.”
Underlining the need for better upgrading technologies and a thinner, more efficient flow of oil through pipelines, Alberta announced in February a $1-billion loan guarantee and grant program for companies willing to set up upgrading facilities in the province.
Related: UBC research aims to remediate problematic oil sands process water
Whereas other partial upgrading techniques lighten oil enough to pass through pipelines by extracting carbon from it, Sherritt’s process instead injects it with hydrogen using its high-pressure autoclaves. The technology dates back to the 1950s, first applied to the company’s coal liquefaction operations, and has the ability to maintain the volume of the oil without stripping it of low-grade carbon. “If we put a barrel of oil into our process we get a barrel out,” Pathe explained. The bitumen is pumped into an autoclave similar to the way ore would be. After being injected with hydrogen at a high pressure and temperature, Sherritt can “induce a chemical reaction in the oil that binds the hydrogen, and thereby chemically lightens the oil.”
Beginning in 2015 with Cuban heavy oil and more recently moving on to bitumen, the testing was carried out in the company’s research facilities outside of Edmonton in Fort Saskatchewan. It may seem like a divergence from the company’s wheelhouse, but Pathe said the technologies underlying the process highlight Sherritt’s unique expertise. “It does, on the face of it, appear a bit of a step-out for a cobalt company to suddenly be in the oil upgrading business, but I really do think it’s a real demonstration of Sherritt’s ability as a company for process design and for innovation, which we’ve always felt is a differentiating capability of ours,” said Pathe.
According to Pathe, the potential environmental impact of the process is paramount. “It improves the quality of the oil without creating massive slag ponds that don’t have any real use and are an environmental challenge for heavy oil companies today.” In addition to reducing residual slag, the process would also remove undesirable components like sulphur and heavy metals, which can be corrosive to the carbon steel of pipelines, and figure heavily in diluent.
The process is still in the testing phase, but the company is preparing to test it on a larger scale, and Pathe said Sheritt, which licences its technologies to provide services to companies around the world, is in conversation with bitumen producers “to talk about their appetite to look at something like this, and how we might progress it to a more commercial solution.”
