The quickly expanding practice of using railcars to transport bitumen from Alberta’s oilsands to refineries in eastern Canada and the United States presents the opportunity to significantly reduce diluent requirements. However, under current circumstances it may not be enough to move the dial on the industry’s overall diluent demand.
Pipeline dilbit is generally about 70 per cent bitumen and 30 per cent diluent. With rail, it is estimated that ratio can be dropped to 10–15 per cent diluent, or even lower. But, according to crude-by-rail player Grizzly Oil Sands ULC, optimal “railbit” is about 12 per cent diluent and 88 per cent bitumen.
Veteran oilsands transportation, marketing and refining leader Ed Koshka explains that some portion of diluent will always be added in order to knock water out of the bitumen emulsion at a steam assisted gravity drainage (SAGD) central processing facility. He says that rail operators also seem to like to include some diluent in their railcars to ease transportation and logistics, but this may not need to be the case.
“In my analysis, I basically conclude that we should take as much of the diluent out as we can right at the wellhead because the economics just indicate that,” Koshka says, adding that the diluent used to knock out water can be removed at the SAGD facility using a flash treater or a treater that uses heat and resonance time to knock the water out of the emulsion.
“The logistics of getting [the bitumen] from your facility to the railhead, you have to manage very carefully because you’ve got to keep it hot before you can offload it into a tank. Most of the new tank farms that are being built, like the one that Altex [Energy Ltd.] has at Lynton, have heating systems there so that they can keep the whole bitumen warm until it is loaded onto a railcar, and then of course at the other end you would have heating capability in order to heat the railcars before you offload them as well.”
While 100 per cent bitumen, or “neatbit,” may be the economic ideal, including 10–15 per cent diluent isn’t necessarily cost prohibitive.
“Even in that scenario, the economics are about even with pipeline to Chicago [and] to the U.S. Gulf Coast. When you take even more of that diluent out, the economics improve even more,” Koshka says, adding that there are also benefits from diluent haulback by rail.
“That’s enough to drive a small shipper towards rail because they don’t want to be taking on 20-year take-or-pay commitments on pipelines, and rail actually fits better in terms of their growth strategy.”
One way to improve crude-by-rail economics is to bring in economies of scale in the form of unit trains that haul just bitumen as opposed to manifest trains that haul bitumen in addition to other products. The U.S. Department of State estimates that unit trains reduce transportation costs by $3–$4 per barrel over manifest operations.
Several unit train terminal expansions are currently under construction in Alberta. But when it comes to diluent, there is a catch—these terminals are almost by definition pipeline-connected, which means the diluent portion in bitumen being loaded onto railcars is significantly higher.
At Bruderheim, Alta., where MEG Energy Corp.’s Stonefell bitumen storage terminal is connected to Canexus Corporation’s unit train terminal, MEG is building a $75-million diluent recovery unit (DRU) in order to improve these economics. Cenovus Energy Inc. has announced it is considering its own DRU to get more for its railbit, but so far nothing is concrete. Other unit train terminals being built do not include DRUs, including the $170-million Edmonton Rail Terminal joint venture between Imperial Oil Limited and Kinder Morgan Energy Partners L.P.
Despite the growing use of crude by rail, Peters & Co. Limited is maintaining a diluent demand forecast for the oilsands that continues to rise dramatically.
“We believe that the use of rail to transport bitumen would need to increase by multiples over our current forecast in order to result in a situation whereby condensate demand is materially reduced,” analysts wrote in an early April energy update.
“Even if this dynamic unfolds, the large producers have in most cases entered into take-or-pay contracts with midstream providers for transportation services for terms of 15–25 years…. [Additionally,] the use of DRUs is not widespread and there are few plans in place to construct these expansions at the large scale rail loading facilities in Western Canada.”
http://en.wikipedia.org/wiki/Diluent
A diluent (also referred to as a filler, dilutant or thinner) is a diluting agent. Certain fluids are too viscous to be pumped easily or too dense to flow from one particular point to the other. This can be problematic, because it might not be economically feasible to transport such fluids in this state. To ease this restricted movement, diluents are added. This decreases the viscosity of the fluids, thereby also decreasing the pumping/transportation costs.
One industrial application is the transport of crude oil via pipelines. Heavy crude oil/bitumen are fluids with high viscosity, especially at low temperatures. The addition of a diluent enables the diluted fluid (dilbit in the case of bitumen) to meet pipeline specifications in order for it to be efficiently transported. Typical diluent in this case is naphtha or condensate.
Types of diluents more familiar to the general public include paint thinner and nail polish thinner, both of which improve the consistency and applicability of the products to which they are added. Diluent is also used as a term in solvent extraction for an inert solvent in which a metal extraction agent (extractant) is dissolved. In solvent extraction the diluent has potentially several uses. It can be used as a solvent (in the purely chemical sense rather than the solvent extraction sense) to dissolve an extractant which is a solid and so render it suitable for use in a liquid–liquid extraction process. In other cases such as PUREX nuclear reprocessing the diluent (kerosene) is used to reduce the maximum metal loading which the organic layer can reach. If the organic layer was to acquire too much metal then a solid metal complex might form, or more worryingly in a nuclear process the potential for a criticality accident if the fissile metal concentration in the organic phase becomes too high.
Source: http://navigator.oilsandsreview.com/blog/diluent-and-crude-rail-dilbit-railbit-or-neatbit/
