Business Challenge

Major oil sands operators needed a reliable technical and economic assessment framework for evaluating innovative new waste heat recovery technologies

Situation

One method commonly used in the Canadian oil sands for in situ oil recovery is steam assisted gravity drainage, or SAGD. This procedure involves the injection of high-quality steam, through wells, into reservoir formations to mobilize oil for collection using pumping wells. Steam production requires the consumption of energy, and results in the generation of waste heat which is traditionally lost to the atmosphere. 

To address this opportunity, two organizations issued the Waste Heat Challenge to prospective technology developers. The objective of the Challenge was to reduce greenhouse gas emissions (GHGs) and increase energy efficiency by identifying clean-tech solutions for capturing waste heat generated during oil sands production. The industry bodies were:

  • Canada’s Oil Sands Innovation Alliance (COSIA): a group comprising 13 major oil sands producers, who collaborate on innovations in focus areas including water, greenhouse gases, land and tailings
  • Foresight: a Western Canadian clean tech accelerator

Advisian was engaged by Foresight through its ARCTIC program to provide technical and economic decision support to assess the viability of two proposed technologies which had reached the current stage of the selection process. 

Our Approach

Advisian created and implemented an integrated technical and economic analysis process, which used structured steps for decision-making. The analysis included steps and tools commonly used within the decision analysis discipline. 

During the framing phase, the project team identified the objectives of the assessment as:

  • To model the energy performance of each technology;
  • Perform a Class V-level scoping study on the technology integrated with a typical SAGD facility;
  • Realize enhanced options for heat and water recovery without compromising operations or environmental performance;
  • Realize fuel and greenhouse gas (GHG) savings; and
  • Optimize footprint and cost.

Subsequent to framing, Advisian conducted the following steps:

  • Technical team review of the ‘reference’ SAGD facility, set boundary conditions, and obtained vendor sizing and costing information for the options
  • Energy performance modeling using AspenHYSYS to find overall fuel gas reduction, GHG emissions and energy balance for a range of configurations
  • Generating total installed cost (TIC) estimates and operational cost estimates
  • Enhanced cost benefit analysis over the project life cycle, including metrics such as greenhouse gas tariffs, using Advisian’s DELTA™ cost benefit modeling software
  • Providing recommendations on the preferred technology configuration/s which were viable for piloting

Value Delivered

The assessment showed that both technologies currently under consideration are capable of providing favourable return on investment in a brownfield environment. In addition, the prior selection process employed by COSIA and Foresight was confirmed as a success, as it identified technologies which were shown to be viable by this assessment. Some key outcomes included:

  • An optimal configuration was found which yielded a cumulative financial rate of return of between 7-15%, depending on the technology selected
  • This configuration was profitable over a wide range of potential future pricing scenarios for natural gas, electricity and greenhouse gas tariffs
  • There are further opportunities for enhancing economies of scale and take advantage of local fabrication, modular assembly, and/or potential longer term cost reduction of materials

At the end of the assessment, the leading technologies and configurations will progress into full scale piloting phase.