The oilsands are expected to be a crucial part of Alberta's future growth and require an enormous amount of energy in order to extract bitumen and turn it into saleable products. Gasification is an attractive method to provide energy for the extraction process by using a by-product of upgrading (petcoke) as the feedstock to produce steam or hydrogen.
Oilsands Information (PDF) |
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Opti - Shell Gasifier Photo courtesy of Shell |
We believe that the oilsands industry is a high growth market in which Alter Nrg is positioning itself to capture significant market share. Our strategy is to use the flexible and scaleable WPC technology to provide energy for oilsands projects and hydrogen for bitumen upgrading. We believe that gasification is ideally suited for the Alberta oilsands as a current waste-product can be used as an alternative to natural gas.
The oilsands market has the following attributes:
Strong Returns
The preliminary pre-tax return on equity based on internal projections is greater than 18% with long-lived (30 year) cash flow and capital costs of production of less than $10 per boe.
Strong Market
Currently, all operational oilsands projects require approximately 1.1 bcf/d of natural gas for the bitumen extraction process. The natural gas usage for oilsands is forecast to be 6.0 bcf/d by 2030 which we believe will create a market for alternative fuel sources. Alberta oilsands production is projected to create the greatest market in the world for hydrogen as well. Currently, the only two viable hydrogen production methods are steam reforming of natural gas or the gasification process.
Environmentally Responsible
We believe plasma gasification is an environmentally superior method of producing steam or hydrogen with low emissions and non-hazardous by-products.
Governmental Support
The Alberta Government is supportive of the use of gasification in the oilsands to
assist in creating energy in an environmentally responsible manner. Alter Nrg has already received a provincial government grant to cover 50% of the cost related to an engineering study to compare the WPC technology to current conventional gasification technologies.
Market Acceptance
The Long Lake Project which includes a gasification facility, is nearing completion and is expected to highlight how gasification is an effective solution. Most major oilsands upgrader projects are evaluating gasification.
Strong Growth Potential
The oilsands market is growing at a significant rate, and therefore, gasification
demand is expected to increase as well.
