Greenfire Named Energy Excellence Awards Champion For Its Oilsands Resurrection From The Ashes Of Devastating Wildfire
The second annual Energy Excellence Awards (EEAs) program, presented by the Daily Oil Bulletin, uniquely recognizes energy excellence and focuses on the advancement of collaboration within Canada’s energy industry.
For 2020, the DOB received close to 90 nominations in four broad awards categories — Project Execution Excellence; Environmental Excellence; Innovation & Technology Excellence; and Exporting Excellence — recognizing work completed last year. The nominees were further broken down into 12 subcategories across the four groupings, before being judged by a committee of industry leaders.
In the following days we will present the champions in each subcategory. Today, we feature the champion in Project Execution Excellence in the subcategory of Oilsands.
Champion Announcement Podcast: Listen to our podcast announcing the champion of this category and a panel discussion on what makes these organizations stand out in relation to project and environmental performance, collaboration, unique technologies and corporate social responsibility.
Joining DOB editor Richard Macedo in discussion is Mark Brown, Vice President and General Manager of Fluor Canada, which is the Gold Sponsor of the Energy Excellence Awards, as well as Caralyn Bennett, Executive Vice President and Chief Strategy Officer, GLJ Consultants.
The catastrophic Fort McMurray area wildfire of 2016 destroyed large parts of the city and surrounding area, racking up damage costs of almost $10 billion — representing the costliest disaster in Canadian history.
While most oilsands production recovered relatively quickly, one of the oldest SAGD operations in the region was not spared. The fire took the Hangingstone SAGD project, then owned and operated by Japan Canada Oil Sands Ltd. (JACOS), offline.
Low commodity prices and what JACOS viewed as an increased technical risk of re-start put the project into long-term suspension. In 2017, JACOS announced the project would to be abandoned, stranding the remaining resources in place.
Calgary-based Greenfire Oil and Gas Ltd., however, saw opportunity in the shuttered facility. Despite being told the project would never be able to produce bitumen again — because the facility, the pipelines and the wells had been suspended and inactive for too long — it acquired the asset in August 2018.
Composed of a project team of experts who had gained expertise designing and operating SAGD facilities for other companies over several years, Greenfire set out to bring the abandoned site back to life. The Energy Excellence Award winner for Project Execution Excellence in the oilsands, Greenfire succeeded in record time.
A pioneer of the SAGD method, JACOS began studying in situ oilsands production in 1992, almost a decade before SAGD became a viable production process. It succeeded in establishing pilot production at Hangingstone in 1999 and had established commercial production by 2003, making it one of the first profitable SAGD operations in the province—and helping to ignite what would become the multibillion-dollar sector that in situ oilsands production is today.
The facility, located about 50 kilometres south of Fort McMurray, produced 35 million bbls of bitumen in its initial 17 years of operations, according to JACOS. While financial terms of its sale weren’t released, parent company Japan Petroleum Exploration Company Limited (JAPEX) said at the time that it expected to book a non-operating profit of US$30 million from the sale.
The facility includes two central processing facilities, a six-well pad with 24 well pairs and associated pipelines. Though some industry experts said the reservoir pressure would not be able to be re-established back to pre-shutdown levels, Greenfire persisted. It undertook a detailed technical review of the project and its infrastructure before beginning with recommissioning and re-start.
Through its efforts, plant operations were re-established in September 2018, first steam was delivered in October, first production was established in November and first bitumen sales were in December.
The project was successfully brought back online after 900 days of suspension, the longest suspension experienced by any in situ facility in Alberta to date. The feat was accomplished with no lost time incidents, no major environmental incidents, and in compliance with regulatory and legislative requirements, the company said. This year, it is producing at over 5,000 bbls bitumen per day, which is comparable to pre-suspension levels.
Within one year of production Greenfire has produced over one million bbls of neat crude bitumen. “Greenfire has achieved what was said to be impossible in a timeframe that many still find unbelievable. Greenfire will return the project back to production above 10,000 bbls/d, an accomplishment that has not been achieved at this site since 2004,” the company said.
“Greenfire is one of the few, if not the only energy company to start up and find success in the last three years in Alberta. These accomplishments were all achieved on a junior, start-up energy company budget. Through operational efficiencies, strict financial controls and running at efficient staffing levels, Greenfire is relentless, profitable and is looking to further development at the project and across Alberta’s oilsands region.”
The company has created over 50 new full-time positions within its organization and is creating revenue for the province that would have otherwise not existed.
Not all Greenfire owners are employees, but all Greenfire employees are owners. Its team of SAGD experts have been working in Alberta for most, if not all, of their careers. Greenfire considers its staff the cornerstone of its operational achievements to date. “Greenfire’s staff pooled their money, got a loan, bought an asset and have been working together towards one goal: ensuring company success.”
Its staff understands the technical challenges of plant operation, the complexities of bitumen reservoirs and associated production challenges, and understands how to maneuver through the complexities of Alberta regulatory and environmental framework, noted the company.
It is producing more bitumen from fewer wells with less waste and at a lower per-bbl cost than the previous operator using the same recovery techniques, mostly through process optimizations. The company also continues to develop its proprietary recovery technology, which promises to achieve net-zero carbon emissions at a low cost while improving production rates and getting a higher per-bbl return.
Greenfire established an equity partnership with a petroleum marketing company that provides distribution and transportation services for its bitumen product to various traders and end-user markets across North America. This gives Greenfire a reliable market for its bitumen and reduces overall per-bbl expenditures.
As Greenfire produces and ships a diluent-free neat bitumen, it can access markets not available to most in situ oilsands producers. This allows its bitumen to be benchmarked against WTI, creating higher returns per bbl and protecting the company from the diluent and crude oil pricing differential that has impacted many of its industry peers.
In addition, Greenfire has a large Indigenous equity ownership stake in the company — it believes it to be more than any oilsands company in Alberta — and has worked extensively with Indigenous groups to provide services to the company and its ongoing operations.
Greenfire also helped create a First Nations/Metis trucking company that is responsible for the transportation of most of its production. It was key to reopening a local lodging facility that was previously shut down due to the recent downturn.
The Champion Series is brought to you by Fluor Canada, our Gold Sponsor, and Spartan Controls, our Silver Sponsor.
Fluor Canada: Since 1949, Fluor Canada has been involved in the engineering, procurement and construction of a wide range of energy related projects that are spread across the Canadian landscape. Fluor provides local, regional and international clients with full-service capabilities, which include economic evaluations, conceptual engineering, feasibility studies, program management, detailed engineering, procurement, transportation and logistics, modularization, fabrication, direct-hire construction, construction management, commissioning, start-up, operations and maintenance.
Spartan Controls: Spartan Controls was founded in 1963 and is an employee-owned company with people and infrastructure in 14 towns and cities across Western Canada. Spartan Controls provides a very broad range of industrial automation products & solutions to all the process industries.