It was a day of celebration in late September as Cal Broder, chair of BitCrude Energy and representatives from Melius Energy watched the shipping container holding 130 barrels of their semi-solid bitumen get loaded onto the container vessel at Prince Rupert and get sent to its destination in China.
“We are moving down the road quicker than we thought. We got through all the regulatory processes and there are a lot of producers keeping an eye on that first container,” said Broder, who has spent more than a decade developing the product.
“I've been at this for over a decade. I had been selling cleaning chemicals to oil sand producers and the looking at the product they were manufacturing, I thought there had to be a better way,” said he said.
“The bitumen from Fort McMurray is sand and a diluent is used for the extraction. So with -in situ, hot water is added. Then you recover the bitumen, separate the water, but you don’t get it all, so you need to add a diluent (condensate) to get rid of the water and then for the transportation,” he said.
Diluted bitumen (dilbit) is the common term for bitumen mixed with a diluent (typically a light crude).
Broder started looking at different extraction processes and started working with chemicals, but soon discovered that was too costly and not efficient.
“Then, I thought why can't we leave it as a semi-solid?” he said, adding that bitumen can be changed from a semi-solid to a liquid very easily.
“It's almost like taking butter, heating it in a pan then pouring it into a bottle. It will turn back to its semi-solid state. Bitumen has the same characteristics,” he said.
The new technology used for BitCrude involves returning the bitumen to a semi-solid state, a process using an electrical diluent recovery unit.
“We can very easily remove the diluent,” said Broder.
BitCrude takes the diluent back out after extraction with the diluent being recycled back to dilbit producers. At the same time, they are removing the bitumen's flammable qualities.
“We remove those little molecules that are flammable. BitCrude has a very high flash point, no chemicals are added and it has passed the regulations under the Department of Transportation.
LC50 testing on fish was also required.
“We did the test and there was no mortality, so the test ran for an additional 72 hours with no change. We were very excited and confident that we can make a very safe product,” said Broder.
After the bitumen is extracted and liquified, it is poured as natural bitumen into shipping containers, where it returns to its semi-solid state for safe transport and will also float in water.
While the test shipment has been sent to China, Broder said there is also interest from India, Malaysia, and Peru.
“Most of it will be made into ultra-low sulphur diesels and the crude from the oilsands is the best crude for it. Malaysia is looking at it for ultra-low sulphur diesel, but also want asphalt,” he said. “The Asian market is prepared to pay high market prices because we’re providing a one-stop market for them.”
In addition, there are environmental benefits during every step of the process, Broder said.
“By moving that bitumen as a solid, we are reducing greenhouse gas emissions on that barrel by 50 percent or more,” he said. “We have great stories in every step of the process. Moving it as a solid will have lower greenhouse gas emissions than moving through pipeline and we use container vessel rather than a tanker- container is 20-25 percent more efficient.”
“The oil sands are unique. With oil wells, there is a depletion rate that starts with a high rate of production and depletes from there. The oil sands have a flat line rate of extraction, so when talking to customers in China, they want to know that we have a stable product. This highest yielding diesel will reduce greenhouse gas emissions.”
Melius Energy, an entity created for the product's commercialization, provides the marketing and logistics for BitCrude.
“Melius is thrilled to work with BitCrude to utilize existing infrastructure to move bitumen, similar to how we move other consumer goods,” said Nicole Zhang, president of Melius Energy, in a press statement.
Melius anticipates the potential to move 120,000 barrels a day in 100-unit trains to Prince Rupert.
“Bitcrude/Melius shipped a demonstration container of bitumen from Edmonton by rail in a custom shipping container and it is now being transported by standard vessel to Asia off the Port of Prince Rupert.This particular shipment will be headed to China. Melius Energy is currently in negotiations with numerous refineries in Asia,” said Christina Pilarski, Melius spokesperson. “Melius' potential export volume is exponential. It could potentially be as much or as little as a producer needs. The volume is based on the need of the producer. This is the first shipment - but Melius is prepared to commercialize today. Currently they are working towards finalizing partnerships with producers in Canada. Their operations are easily scaled - a partner can start small and Melius has the capacity to scale and grow quickly to meet the needs of the end-customer and the producer.”
The test container is expected to reach China in the coming days and Broder expects the first charter ship from Prince Rupert straight to China sometime in the first quarter of 2020.
“This is a very exciting opportunity for Alberta,” said Broder.