The development of a techno-economic model for the extraction, transportation, upgrading, and shipping of Canadian oil sands products to the Asia-Pacific region

Abstract

The diversification of Canadian oil sands markets is imperative for the long-term economic growth of oil sands products. To ensure a competitive place in the global market, supply chain costs of oil sands must be as low as possible. This study conducts a comparative techno-economic analysis of potential pathways for the transportation of Canadian oil sands products (synthetic crude oil and diluted bitumen) to seaport destinations in the Asia-Pacific region. We developed data-intensive techno-economic models to estimate total supply chain costs from the production site in Alberta to ports in China, Japan, and India. Four pathways were developed using production (steam assisted gravity drainage), transportation (production-upgrader-port in Vancouver), upgrading, and shipping operations. A sensitivity analysis was conducted to identify cost ranges with their occurrence probability measures and evaluate the effect of key parameters for each stage of operation. Supply chain costs (C$ per barrel of bitumen) to China, Japan, and India are from 61–87, 60–86, and 62–90, respectively. Overall supply chain costs of dilbit (a blend of bitumen and diluent) and synthetic crude oil (SCO) are affected most by production and upgrading costs. The production and upgrading costs are influenced by capital cost, while pipeline lifetime and capacity highly impact transportation (pipeline) and shipping costs, respectively. The developed models can be used to predict total supply chain costs of different pathways in Canadian oil sand markets.