This potentially game-changing concept is the fruit of 12 years of laboratory development led by Pedro Pereira-Almao, the director of the Alberta Ingenuity Centre for In Situ Energy at the University of Calgary.

This year, Pemex signed an agreement for a $30 million in-situ upgrading (ISU) technology pilot project in one of its declining heavy oilfields. In addition, Pereira-Almao said he has signed an agreement with one of the oilsands’ largest operators to launch an ISU pilot project by next year.

“This might be the next technological revolution in the oil industry,” Pereira-Almao, who is the former manager of heavy oil upgrading for 14 years at INTEVEP, the research arm of Venezuelan state-owned PDVSA, told the Daily Oil Bulletin.

Pereira-Almao said ISU can create light oil from most types of heavy oil around the world, from Canada to Oman to China to Venezuela. This technology will allow heavy oil producers to increase the value of their product in times of low prices while cutting expenses and their environmental footprint, he noted.

The recipe for ‘slow cooking light oil’

The chemical engineer said ISU is the next quantum leap in oilsands development as there are physical and economic limitations in the improvement of the SAGD process.

“This is a much better solution than just optimizing SAGD,” said Pereira-Almao.

SAGD facilities can adopt ISU without much disruption, he said. It only requires a distillation tower, and a small chemical skid.

The ISU process is designed to turn heavy oil within a reservoir, with an API under 10, into lighter oil, with an API between 22 and 26.

The process begins with hot bitumen coming out from the production well. Then, it is sent to a distillation tower, which Pereira-Almao described as a simpler model than those found at conventional refineries.

At the distillation tower, the bitumen splits due to high temperatures and atmospheric pressures. Floating at the top will be natural gas, resting in the middle will be light oil, and sinking to the bottom will be residual heavy oil — or vacuum residue. Then each product is removed by layers.

“From the first moment [of the process] you produce light oil,” said Pereira-Almao. “This time advantage is enormous.”

The vacuum residue is one of the biggest headaches for the oil industry, explained Pereira-Alamo. This residue contains metals and elements that harm pipelines and equipment, and it is what makes it very expensive to build and operate an upgrader.

During the first three to six months of the ISU application, a skid would add nano-catalysts to the vacuum residue. Then, the residual heavy oil is pumped back via the injection well into the reservoir along with hydrogen and a lower rate of steam.

The nano-catalyst sticks to the rock around the injection well, slowly turning the reservoir into a giant chemical reactor, similar to the one found in a refinery.

While a refinery complex uses a lot of energy to create high temperatures to break down oil very fast, ISU would use the elevated temperature conditions created in SAGD reservoirs to upgrade the oil.

Hydrogen and the nano-catalyst react chemically, breaking down the vacuum residue continuously. Because of the hydrogen, the residual heavy oil is upgraded into light oil without producing petroleum coke.

The hydrogen used by ISU is an eighth of what a hydrotreating unit at a refinery uses to break down oil. “We just add the minimum needed to upgrade it,” said Pereira-Almao.

Due to the nano-catalyst reaction, all the undesirable metals in the vacuum residue are absorbed by the rocks in the reservoir, he explained.

“It is like slow cooking. You add all your ingredients, let it simmer overnight and instead of getting a tender lean meat, you get light oil without nasty things.”

The skid required to inject the nano-catalysts would cost under $4 million, and only be used between three to six months until the catalyst bed is formed within the reactor.

After this, the skid could be moved into a new SAGD field to implement ISU and inject nano-catalysts into the reservoir. 

ISU’s wide range of benefits

One of the advantages of the ISU concept, said Pereira-Almao, is that the lighter oil produced would have lower emissions than diluted bitumen or synthetically upgraded oil from a SAGD operation.

Also, ISU could recover more oil than SAGD alone. Pereira-Almao’s team has calculated if all operators adopted ISU, Alberta’s in-situ oil production would increase to 1.6 million bbls per day from 1.2 million bbls per day currently.

ISU has the potential to increase the recovery rate of traditional SAGD operations to 95 per cent from 60 per cent, he said.

“Reservoir simulations and experiments show that ISU can recover 50-90 per cent more oil than SAGD in less time,” said Pereira-Almao.

Another advantage of ISU is that it could decrease SAGD water use by 60 per cent, and also the rate of water that needs to be treated from each bbl of oil produced.

Because of the reinjection of hot vacuum residue and the creation of more heat within the reservoir due to the nano-catalyst reaction with hydrogen, the ISU process turns the SAGD system into a giant heat pump.

The combination of these elements would increase the temperature within the SAGD reservoir to 330 C from 230 C, Pereira-Almao said.

With higher ISU temperatures, the production well would reach 270 C. Water, which usually condenses in a typical SAGD operation, would re-evaporate because of these higher temperatures.

Another benefit of ISU is that lighter oil produced would require no diluent to be transported. “ISU would unlock pipelines’ bottleneck,” explained Pereira-Almao. His research team calculated that if all heavy oil operators adopted ISU, a third of Alberta’s pipeline capacity would be available.

“It gives you the time to not invest in pipelines you might not need in 15 years,” said Pereira-Almao.

Currently, Pereira-Almao is looking to partner with more operators to deploy ISU in Alberta. The engineering of the catalytic skid is ready and it will be built by Braeside Fabricators Inc., a manufacturer of oil and gas equipment based in Calgary.

“This technology provides the breakthrough the Canadian industry needs both environmentally and economically,” said Pereira-Almao.