This may be a naive question but what will happen to the other 90,000 barrels per day? Does it get piped back to the source? Put into tailing ponds? Turn into green-house gases? Magically disappear?
"Funded by Black, a newspaper magnate who has 170 papers across North America, the seven-month project was undertaken by engineering firm Hatch Ltd. It lays out plans for the proposed Kitimat Clean complex, which would be able to process 550,000 barrels of bitumen into 460,000 barrels of refined fuel each day." |
Oh, refining changes the physical volumes because of chemistry and burning some of the oil as fuel. A bunch of stuff comes out:
http://www.ilocis.org/documents/images/oil01fe.gif Source: http://www.ilocis.org/documents/chpt78e.htm Before that you have to upgrade though. I would guess that the plan is to use a similar process to the North West Upgrader. http://www.hydrocarbons-technology.c...-and-units.jpg Source: You can move solid remnants that may be hard to market up the chain, but every bit extra at the high end requires more equipment and energy input, which is what North West does. The NGLs would be shipped back to as diluent by pipeline if it makes sense with prices at the time, or can be containerized for shipment off the continent, or special carrier (train or ship). |
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here is some info/news on the other proposed (massive) BC refinery. This one backed by Mexican conglomerate Grupo Salinas:
Pacific Future Energy appoints two former national chiefs to advisory positions Vancouver Sun - Dec 10, 2014 http://www.vancouversun.com/business...026/story.html Quote:
http://www.pacificfutureenergy.com Engineering Partner Simeco Milano http://www.simecomilano.it |
Depends on the process, but you can upgrade coke and asphalt to product, or burn it for heat value (what Long Lake does), it just takes a lot of energy input (as hydrogen and heat) and special equipment to upgrade it, and if you can sell it as coke, your netback on the upgrading narrows, and it is better to sell as coke.
Kitimat Clean sounds like it would have four associated pipelines, natural gas (though the local grid is probably good), CO2, diluent, and dilbit/synbit. |
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Refining is an awful business (lots of excess worldwide capacity, hyper competitive, where integrated players have incentives to squeeze others out) where Canada has no comparative advantage, and game theory works out that most nations would prefer to build their own than tie into someone else's (since then they can access the fairly liquid market for crude instead of products, instead of being tied to ours).
A business where both your inputs and outputs trade as commodities you are at the whim of price cycles doubly so. For ease of trading the spread trades directly: http://www.cmegroup.com/trading/ener...p-futures.html A more detailed part is here: http://www.howardweil.com/docs/Repor...NINGReport.pdf |
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Chevron has found a new partner for the Kitimat LNG project. Apache had announced earlier in the year it was pulling out of LNG worldwide.
Apache sells Kitimat LNG stake to Woodside Dec 15, 2014 - Globe and Mail http://www.theglobeandmail.com/repor...ticle22083406/ Quote:
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And yet that process creates byproducts used in the manufacturing of thousands of products, and daily activities.
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As for the "delayed" FID on Petronas' proposed LNG facility:
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Its a good sign that other international companies are still joining in.
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The last refinery built in North America was in Alberta back in the early 1980`s IIRC. For an obvious reason. Oil, of any grade, is typically sold to a refinery. And those refineries are situate near, or in close proximity to, major population centres. These NW BC refinery proposals are just major pipe dreams. That`s all. Not worth their weight in salt. |
^Agree! Why on earth would Black be putting his own money into studies?! And I think the ofher guys are from the Tech world...
The feds have restarted their enviro review for PNW LNG. |
For refining, one is Mexico money and one is Saudi money iirc. Both areas with recently built heavy oil refineries so natural partners. But yeah, I think there is a higher chance of one or maybe two of the large LNG plants being built in this cycle (the small ones are so small potatoes that they count regionally for jobs but overall impact is small).
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Just saw in the news today that any LNG pipeline in BC will be banned by the government from being converted to transport oil or diluted bitumen. This came up during environmental assessments and talks with First Nations.
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I've been watching gas prices slink below $1.20/L for the first time since the Arab Spring protests, and below $1/L for the first time since the financial crisis.
Should I be panicking about the potential fizzle of the LNG boom, ancillary job growth in Vancouver, and debt-busting sovereign wealth fund? |
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The plants would be built for market conditions in 2019-2021. That market is anyone's guess...just depends if the LNG plants can sign enough supply contracts now, at the right price. I guess it's a good thing the price of NG in North America has gone down along with oil, as that is a main LNG input cost. recent story on the very subject you ask - the industry still thinks 3 plants will be built by 2020: http://www.cbc.ca/news/canada/britis...tudy-1.2892505 Cheers. |
well, an update from Exxon. Their time-line was submitted along with their application to the BC Environmental Assessment office. Hope to have their environmental certificate by 2016, and go from there. Makes me think that a positive FID from Petronas this year is more likely.
Exxon plans to spend up to $25-billion to export B.C. LNG VANCOUVER — The Globe and Mail - Sunday, Jan. 11 2015 http://www.theglobeandmail.com/repor...ticle22406569/ Quote:
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