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The great white north

Published by , Senior Editor
Hydrocarbon Engineering,

While the public may imagine Alaska and Canada as a land of cold and darkness, the region is a hot territory for the production of oil and gas in North America. Both areas, however, are beset by unique trials that range from environmental to regulatory and indigenous opposition.


In British Columbia (B.C.), gas production has been growing in leaps and bounds. The Montney shale (which extends into northwest Alberta), holds almost 450 trillion ft3 of recoverable reserves, and production is approaching 10 billion ft3/d.

The gas market is glutted in Canada, however, and operators are looking to gain higher returns. In mid-2019, West Coast Olefins (WCOL) announced plans to build a CAN$5.6 billion petrochemical facility in the port of Prince George, B.C. The plant would produce 1 million tpy of ethylene and polyethylene for export to the Asia Pacific market. The plant would be designed to recover NGLs from Enbridge’s 2.1 billion ft3/d Westcoast Pipeline. If approved by regulators, the facility would finish construction by 2023.

In late 2019, Royal Dutch Shell and partners began construction of the LNG Canada project in the B.C. port of Kitimat. When the US$31 billion project is completed in 2025, it will consist of two 6.5 million tpy liquefaction trains, with the prospect of adding two more, for a total capacity of 26 million tpy.

The growth in the oil sands, an immense deposit of 165 billion bbl of bitumen in northeast Alberta, has suffered significant setbacks in the last several years. Environmental opponents have labelled it as ‘dirty oil’, and successfully thwarted the development of several pipelines, creating bottlenecks on exports that caused crude storage to reach a record 39 million bbl in late 2019.

The logjams have created several consequences. Operators without firm pipeline contracts were forced to take large discounts in order to attract buyers, which resulted in the Alberta government introducing production curtailments. International majors such as Total and BP sold their interests in the oil sands, seeking better returns elsewhere.

In spite of the headwinds, output from the oil sands grew from 2.4 million bpd in 2015 to 3 million bpd today. And production is expected to increase at approximately 100 000 bpd annually for the next decade, reaching 4 million bpd as operators focus on incremental increases in existing assets, removing production bottlenecks, and bringing on smaller scale projects. Cenovus, for instance, will add 50 000 bpd with its Phase G Christina Lake in 2020, and Suncor plans to move ahead with 40 000 bpd Meadow Creek West in 2023…

Written by Gordon Cope, Contributing Editor.

This article was originally published in the June 2020 issue of Hydrocarbon Engineering. To read the full article, and other great technical articles in this issue, view the full issue here. You can also register to receive a free regular copy of the magazine here.

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