Oilsands upgrading tapped for gas

Firm to gather off-gas from bitumen processing

(It) will ... further reduce ... emissions

DAVID CHAPPELL, WILLIAMS ENERGY CANADA

The Canadian branch of Oklahoma-based Williams Cos. has signed a second gas-processing deal with a Fort McMurray oilsands upgrading company, believed to be Canadian Natural Resources Ltd.

Under the agreement announced Wednesday, Williams will gather off-gas produced from bitumen feedstock during the upgrading process and extract valuable natural gas liquids suchasethane and propane.

The pure methane will then be returned to the oilsands company to be burned to produce energy, reducing greenhouse gas emissions versus those produced from burning all of the off-gas.

The deal builds on one in place with Suncor Energy Inc. Williams did not identify the other party to the new agreement but a Calgary oilsands analyst said it must be with either CNRL or Syncrude Canada because they are the only other upgrading companies operating near Fort McMurray.

Cheryl Robb, aspokes woman for Syncrude said later in the day: “It’s not us.” An e-mailed request for comment to CNRL elicited no response.

Williams said it plans to build a new liquids extraction plant and supporting facilities at the oilsands producer’s upgrader, plus build an extension of its Boreal Pipeline to bring the NGL/olefins mixture to its expanded Redwater facility northeast of Edmonton.

The capital budget for the project is between $500 mil- lion and $600 million and the 2012-14 portions were included in guidance issued on Aug. 1, it said.

“The scale that we are building here — with fractionation, distribution and storage — gives us the ability to generate significant longterm incremental value from our operations,” said David Chappell, president of Williams Energy Canada, in a news release. “The new operations will also further reduce greenhouse gas and sulphur dioxide emissions from the upgraders’ oilsands operations, and produce valuable commodities that were previously being burned.”

Williams spokesman Jeff Pounds said he didn’t know why the new partner didn’t want to be identified.

“Suncoris our currentoff-gas operation (partner),” he said in an interview. “There are two of them now.”

Once full operating capacity is achieved, Williams said it will reduce emissions of carbon dioxide by about 200,000 tonnes per year and reduce emissions of sulphur dioxide — a contributor to acid rain — by about 2,000 tonnes per year.

Combined with the Suncor operations, annual CO2 emissions will eventually fall by more than 500,000 tonnes and annual SO2 emissions by 4,500 tonnes, it said. The second agreement is expected to result in the recovery of 12,000 barrels per day of NGL/olefins by mid-2015 and willlikely grow to 15,000 bpd by 2018.

The mixture is to be fractionated at Williams’ Redwater facilities into an ethane/ ethylene mix, propane, polymer grade propylene, normal butane, an alkylation feed and condensate.

Williams recently announced a long-term deal to supply Nova Chemicals Corp. with up to 17,000 bpd of ethane and ethylene and the propane will be sold into the local market or used as feedstock at Williams’ proposed propane dehydrogenation facility.

Williams, headquartered in Tulsa, is one of the largest pipeline and gas processing companies in North America.