Cogeneration Potential in Western Canada

Abstract

Abstract Western Canada has very large heavy oil and bitumen resources, the recovery of which will require the application of thermal recovery processes in most cases. The most common thermal process involves injection of large quantities of steam. Steam generation accounts for approximately 30 percent of the costs of recovering heavy oil and bitumen. Reduction of this cost, therefore, is a very important factor in the economics of recovering heavy oil and bitumen and affects the amount that will be ultimately recovered. Cogeneration of steam and electricity has been implemented at a number of projects in California and other places. It has proven to be one method of improving the energy efficiency and reducing costs of both electricity and steam. An industry-supported study of cogeneration as it would apply to Canadian operations was undertaken in 1992. Typical small, medium, and large heavy oil or bitumen thermal recovery projects of 4,000, 15,000, and 50,000 BOPD were identified and conceptual cogeneration designs, cost estimates, and economic evaluations were carried out for 10 scenarios. Sensitivity analyses were conducted to frustrate the relationship between the power buy-back rate and fuel costs on the economics of potential cogeneration projects. The simple cycle gas turbine configuration applied to medium and large volume projects was shown to have potential applicability. The design, cost estimates, economics, and other factors that must be considered in developing a cogeneration project are discussed. Introduction Western Canada, specifically Alberta and Saskatchewan, has vast reserves of heavy oil and bitumen that could supply Canada's petroleum requirements in the years to come. Current estimates show heavy oil and bitumen in place to be in the order of 276 billion m3. Conventional oil reserves in western Canada are declining as current oil fields become depleted and new oil discoveries are slow to replace dwindling reserves. However, with the current oil price environment, heavy oil and bitumen are not being developed to their potential due to unattractive economics. Only a small portion of the vast heavy oil deposits can be produced by the simple inexpensive methods of primary recovery. A far greater portion of the heavy oil and bitumen could be produced under enhanced oil recovery (EOR) techniques. Of the several EOR systems technically feasible, steam-based thermal systems have proven to be the most likely method selected by many producers. S team for injection into heavy oil and bitumen-bearing formations is normally generated at high pressure by natural-gas-fired steam generators. The cost of generating this steam has a major impact on the economics of producing the heavy oil or bitumen. The gas cost alone has been estimated3 to range from $1.50 to $3 per barrel of heavy oil or bitumen produced. Any reduction of this cost, therefore, has a very positive impact on the economics of recovering this resource. Cogeneration, which includes the simultaneous production of electricity and steam, would have the potential to supply steam in a very efficient and cost-effective manner. P. 59