Industrial: Powerful project

Imperial's Nabiye expansion includes development of a new steam generaton plant and bitumen processing plant

There's another boom going on in Alberta, aside from the well-publicized one in the oilsands, with new power generation plants being built at a pace never seen before. And much of that is cogeneration, aimed at producing both steam and electricity.

The newest cogeneration plant will be at Imperial Oil Ltd.'s Cold Lake project, where the company's $2-billion Nabiye plant is being designed to add 40,000 barrels a day of oil production and to also include a 170 megawatt (MW) cogeneration plant. The plant will go into operation in 2014.

The additional power is just the tip of the proverbial iceberg, according to Evan Bahry, executive director of the Independent Power Producers Society of Alberta, which represents most of the 30 companies that compete to build power plants in Alberta (not including oil and gas companies that build cogeneration as complementary projects to their oilsands plants).

"Cogeneration makes all kinds of sense," Bahry observes. "It's scalable, so you can build plants ranging from 10 MW to 170 MW or larger. Natural gas prices are very low, so you can produce power inexpensively. In addition, once you produce steam (for injection into reservoirs to bring bitumen to the surface) you can't transport it too far."

That latter dilemma has led to a decision by more oil companies using steam assisted gravity drainage (SAGD) technologies or those using cyclic steam stimulation (CSS), which Imperial uses at Cold Lake, to utilize that steam to generate power.

Under Alberta's deregulated power market structure, those companies can sell power generation that exceeds their own needs into the provincial grid.

Bahry doesn't expect them to face any serious problems finding markets.

"With hundreds of billions of dollars in oilsands investment expected over the next few years, you'll see that driving more and more investment into cogen," he says.

Citing a recent report that U.S. consultancy The Brattle Group prepared for the Alberta Electric System Operator, he says the province will need to almost double the amount of new generation it has been adding annually-from about 380 MW to 740 MW-to meet projected demand. Battle estimates that would be needed for the next 20 years to meet a load growth of 3.2 per cent a year (and to counter the retirement of about 220 MW a year).

Cogen gains

"We'll need all of the generation we can get, no matter where it's located," Bahry says.

Alberta has added 6,400 MW of generation in the last 10 to 15 years, he points out. "Of that, about 1,000 MW came from coal, 770 from wind generation and the rest came from natural gas, with a majority of that being cogen."

The Brattle Group forecasts that most of the almost 15,000 MW in new generation that will be brought on over the next 20 years will be natural gas based. That would represent an addition overall of about 10,400 MW, taking into account the power plant retirements expected in that period, likely to total about 4,400 MW (mostly among the province's 6000 MW of coal-fired plants).

Existing power generation in Alberta now totals 13,939 MW.

Imperial's planned cogeneration plant would be essentially a twin to the 170 MW power plant that was a part of the Mahkeses expansion, which added about 30,000 to 40,000 bbls a day of production to the Cold Lake commercial project in 2003-04.

Production will reach 200,000 bbls a day in 2014, when the expansion will be completed, says Imperial spokesperson Pius Rolheiser.

Mahkeses (the Cree word for "fox") essentially was phases 11, 12 and 13 of the project, which was reinvented after a previously planned multi-billion dollar megaproject was shelved in the early 1980s, a victim of low oil prices and the National Energy Program.

Ironically, the "megaproject," which would have included a heavy oil upgrader, actually was designed to produce about 140,000 bbls daily, Rolheiser says.

The Nabiye expansion (nabiye is a Dene word meaning "otter") comprises phases 14, 15 and 16. It will be located northeast of the company's existing operations, which include the Leming, Maskwa, Mahihkan and Mahkeses plants. The Leming, Maskwa and Mahihkan plants did not include cogeneration facilities.

The project will include development of a new steam generation plant and bitumen processing plant, as well as field production pads and associated facilities.

The company actually had Energy Resources Conservation Board approval for the Nabiye expansion in 2004. However, it delayed moving ahead and instead went ahead with a "debottlenecking" plan to improve the performance of existing legacy plants.

That delays allowed it to re-engineer the expansion to improve its environmental footprint, Rolheiser says. Imperial applied for approval again in 2009, with the changes being included in the application.


Smaller footprint

"The surface footprint will be 40 per cent less because we'll be using horizontal drilling," he says.

In addition, plans include the cogeneration plant and a sulphur recovery technology that will "significantly reduce" sulphur dioxide emissions, he says. The addition of the cogeneration facility also vastly improves the environmental performance of the project, he adds.

"Cogen results in more energy efficiency," he says.

The two cogeneration plants mean Imperial will be self-sufficient in power-representing a substantial cost savings (but not one it would reveal)-and will be able to sell excess power to the grid.

Both cogeneration plants use similar proven technology, the General Electric Frame 7 gas turbine, first manufactured in the 1960s.

"They're heat-recovery steam generators," Rolheiser says. "It's like a car radiator in reverse. You run water through the pipes and as it goes through the water is converted to 300-degree (C) steam. The steam is then used to create steam for bitumen recovery and to create electricity."

The cogen plant will be an integral part of the project.

The peak construction workforce of 1,000 is expected to be reached by mid-2013.

Imperial will act as the general contractor for the expansion, as it did for the previous expansions. Rolheiser says the company would likely reveal the successful bidders for the Nabiye expansion by this summer.

Flint Energy Services and Ledcor Group were the successful bidders for the Mahkeses expansion.

Cold Lake, the largest and longest-running in situ oilsands operation in Canada (in situ projects require technologies to recover bitumen from deeply buried deposits), has considerable room for expansion, Rolheiser says.

"We've developed less than one-third of the lease area."

As of 2009 Imperial had produced one billion barrels of oil there and is experimenting with several different technologies to increase recoveries, in addition to the to the CSS approach it now uses.

The newest project will provide access to 280 million bbls of recoverable reserves, compared to the 250 million bbls envisioned when Imperial began planning the project a decade ago.

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