Solvent: State of the Industry
Event Highlights from the Energy Changemakers Series
Introduction
The 29 October 2024 CHOA Energy Changemakers series event attracted a full house to the Petroleum Club’s Devonian Room to listen to industry experts discussing Solvent: State of the Industry.
Participants included:
Deirdre Norman, Imperial Oil
Jared Wynveen, McDaniel
Alex Filstein, Vaultext Solutions
Moderator, Kevin Joslin (CMG)
Sponsors CMG, Rock Flow Dynamics, and the Pathways Alliance?
SA-SAGD: A Story of Transformation
presented by Deidre Norman, Imperial Oil
Imperial has a long history of technology development and deployment. This discussion focused on Solvent Assisted – Steam Assisted Gravity Drainage (SA-SAGD) technology,. how we have learned from and translated a successful pilot into a full commercial deployment, key operational considerations as we started up this solvent based technology, and how Imperial assess solvent benefits vs base SAGD production.
Deirdre Norman started the session with an overview of Imperial’s SA-SAGD story.
SA-SAGD was first piloted in the Clearwater Formation at Cold Lake in 2009, and it demonstrated commercial readiness in 2014.
SA-SAGD was developed from Imperial’s LASER process which used diluent addition to steam to enhance the CSS process used commercially at Cold Lake.
Imperial had originally intended to build a Greenfield Project, but instead decided to apply it at a Brownfield Project in the Grand Rapids Formation at Cold Lake to enhance capital efficiency by leveraging existing infrastructure and available steam capacity. This commercial Brownfield Project began operation in late 2023.
The key to getting ultimate project approval was exemplary teamwork between the research, development, project, and operations teams - no internal silos.
Deirdre’s overall key points were that significant asset evolution is possible by effectively challenging the status quo, and deployment timing needs to balance technical rigor with urgency.
Solvent Technologies Industry Overview
Opportunities, Challenges & Where Do We Go from Here?
presented by Alex Filstein, Vaultext Solutions
In his update on the state of the industry when it comes to adding solvent to SAGD, and the differences between using light and heavy solvents, he discussed:
Cenovus’ SAP/SDP (solvent-assisted and solvent-driven) process.
ConocoPhillips’ WASP (warm solvent) process.
MEG’s eMSAGP and eMVAPEX projects at Christina Lake.
ConocoPhillips’ ES-SAGD pilot on Surmont Pad 131 in 2015 using diluent co-injection.
Suncor’s pilot at Firebag in 2022.
Connacher’s commercialization of its SAGD+ process in 2022, and its project at Great Divide in 2023 using a lighter hydrocarbon.
CNRL’s pilot of solvent co-injection at Kirby South using butane, with solvent recovery of about 14 kb/d; Alex thought this was the most advanced project in the solvent space.
Alex also highlighted the following Key Observations:
The largest challenge with solvent co-injection is competition for funds being allocated to debt reduction, buybacks, dividends, mergers and acquisitions and R&D technology, and posed the question, “How do you commercialize a technology while dealing with uncertainty”?
Industry has between $0.2 and $0.5 billion invested into solvent, with emissions reduction being the largest driver (20-45 percent reductions are proven and achievable).
The future would likely involve modular integration to reduce CAPEX, with this being the only route that smaller producers will take, as opposed to new greenfield projects.
Collaborations with COSIA and the Pathways Alliance are a way forward for this technology.
Solvent Solvent Economics and the Path to Commercialization
presented by Jared Wynveen, McDaniel
Understanding the commercial potential of solvent use in heavy oil production, Jared’s presentation explores how solvent-assisted and solvent-driven strategies differ in scale, complexity, and application.
Jared Wynveen focused on the size of the prize when it comes to the use of solvents for heavy oil production and:
Suggested that companies need to again assess the viability of using solvents within a steam-constrained world.
Differentiated between solvent-assisted projects (solvent volumes of up to 20%) and solvent-driven (solvent volumes of about 95%).
Noted that the most common solvents used are butane, propane, condensate and CO2, with the first three being applied at the vast majority of pilots carried out in the south Athabasca.
Explained that McDaniel’s approach is to establish a benchmark; for example, Foster Creek proved that production can be maintained with an approximately 90% reduction in iSOR.
Presented a chart of changes in productivity and SOR due to solvent addition, and noted that not all solvent pilots are created
Equal and not all assets perform similarly - so piloting is definitely needed.
Provided a case study with and without solvent, which showed materially higher cash flow (assuming an oil price of $70/bbl) for the solvent case vs. SAGD only.
Panel Discussion: What’s Next for Solvents?
Insights from the Field
Insights from Deidre:
When asked if Imperial had made any mistakes in its SA-SAGD development; Deirdre responded, not mistakes, but an extended timeline had resulted due to testing the process in the Grand Rapids when they had initially planned a greenfield project elsewhere.
When queried about which was more viable, solvent-assisted, or solvent-driven, Deirdre said that there is space for both, and Imperial is progressing the full gamut of technologies.
When asked how they developed enough confidence to go from a two-well pilot to a 20-well project, Deirdre said that they used industry analogs, and baselined externally on the Grand Rapids. They also have their own wells with no solvent to get their own baseline.
They are stepping their way into commercial deployment of SA-SAGD with no government incentives.
In terms of the biggest threats to the project, she said that these were scaling from one reservoir to another, bottom water, integrating into a Brownfield Project (the facilities were designed for CSS, i.e., lower-quality steam).
Deirdre noted that suitable modeling is the first step.
Alex’s Commentary:
Incentives such as the carbon tax can be important.
It is easier to phase into solvent-assisted projects.
In terms of government incentives to transition to solvent, Alex said that he was not aware of any, as the AER considers it a commercial process.
The solvent price tracks WTI and the business is capital intensive.
He is bullish on solvent integration in a high carbon tax environment.
Perspectives from Jared:
Jared was invited to comment on the most appropriate ways to set up a pilot, and he stressed that isolation and proper measurement were crucial.
Solvent-assisted has the most chance of success, as solvent-driven requires a greenfield project.
He hasn’t seen much solvent deployment, but then the carbon tax has not really started to bite yet as a key driver, and many operators have done a good job with optimizing SAGD.
Jared was asked about the biggest challenge in commercialization, given that a lot of capital is put into the ground in the form of solvent. He said that one challenge is the sheer volume of solvent required - the Montney and Duvernay would be used up fulfilling the solvent needs if all operators went to solvent. He would see a phased approach in implementation.
We haven’t yet had support from investors to put solvent in the ground; however, it is possible to have enough of a long-term view if we appear to have stable oil prices.
Closing & Acknowlegements
CHOA’s Energy Changemakers Technical Session was followed by informal discussions and networking with delicious nibbles and beverages.
CHOA extends its thanks to its panel participants, sponsors CMG, Rock Flow Dynamics, Pathways Alliance, and its volunteers, and staff responsible for organizing this successful event.
Speaker Bios
Deirdre Norman, P.Eng.
Development Planning Manager, Imperial Oil
Deidre Norman is the In Situ Reservoir and Subsurface engineering manager at Imperial Oil, based in Calgary. She has 15 years of experience working with Imperial across diverse technical and business roles, in reservoir and subsurface engineering, corporate planning and reserves, and research, and through those roles supported conventional, mining and in situ assets across the company.
Imperial has a long history of technology development, and Deidre has been fortunate through her roles to be part of that development, including most recently through development, execution, and start up of Grand Rapids Phase 1, Imperial’s first commercial Solvent Assisted SAGD development. Through her role as COSIA Research Lead for IOL, she was a founding member of the Innovation Plus priority area of COSIA, and currently sits as Steering Committee member on In Situ Fundamentals Consortia within Innovation Plus.
Jared Wynveen, P.Eng.
Executive Vice President, McDaniel
Jared Wynveen has broad experience evaluating oil and gas reserves with a primary focus on preparing economic evaluations for annual securities reporting and debt and equity financing. In addition to evaluating numerous heavy oil and bitumen projects, Mr. Wynveen has considerable experience evaluating unconventional tight gas reservoirs in Western Canada, including the Montney, Spirit River and numerous Mannville formations; as well as tight oil plays in the Cardium, Viking and Bakken formations. Jared provides technical and advisory services to financial institutions and foreign oil and gas companies interested in Western Canadian resource plays.
Alex Filstein, P.Eng
Consultant, Vaultext Solutions
Alex Filstein is a proud investor in the Canadian Energy sector and recognized as an industry expert in SAGD and Solvent Assisted and Dominated technologies. He was one of the key leading figures in the development of these technologies for Cenovus Energy and ConocoPhillips, from where he recently retired. He advanced many patents and publications on the topic and successfully advanced these low emissions solutions in the field. He specializes in thermal in-situ production optimization, green technologies integration and co-pioneered the Solvent consortium at COSIA/Pathways to further advance and accelerate solvent technology development.
He served as a Board observer at General Fusion, HiFi Engineering and Saltworks Technologies. Alex is the recipient of the 2018 Oilweek/JWN Magazine Rising Star Award, 2019 Technical Achievement Alumni Award from University of Calgary Schulich School of Engineering and 2024 ConocoPhillips Global SPIRIT Award. He also authored the book “Apollo Autism” which helped many autism families achieve a happier tomorrow and this year celebrates his 10th year volunteering as a mentor at SAIT Petroleum Engineering program.