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The 80 per cent of Canada’s oil sands resources too deep to be mined are recovered in place or in situ, by drilling wells. In situ methods cause less land disturbance than mining.
Shell’s in-situ operations
Shell produces bitumen from its in situ heavy oil leases located in the Peace River and Cold Lake oil sands. In the Peace River area we produce bitumen from the Peace River Complex using thermal recovery methods and from the Cliffdale Battery using cold production techniques. In the Cold Lake area we produce bitumen using thermal SAGD recovery methods.
Peace River: Shell holds a significant land position in the Peace River oil sands area in Northern Alberta, where it produces bitumen through both thermal and cold production techniques.
The Peace River Complex is located about 40 kilometers northeast of Peace River. Shell continues to progress plans to expand our production in the Peace River area using vertical steam drive wells. A regulatory application for an 80,000 barrel-per-day expansion project called Carmon Creek was submitted in January, 2010.
At the end of 2010, Shell began its largest cold production drilling program to date. Spanning 15 months of continuous drilling, the program involved drilling 67 wells on eight pads (six new well pads and upgrading two existing pads) and the construction of an associated gas gathering pipeline system to tie the gas produced with the bitumen into our existing Cliffdale battery. Tying the produced gas into the pipeline effectively eliminated emissions associated with production from these well pads during normal operating conditions.
Grosmont: The Grosmont lease consists of 125,440 hectares of land in the far-west side of the Athabasca oil sands region in Northern Alberta. The lease is approximately 100 km (60 miles) west of Fort McMurray, and approximately 400 km (240 miles) north of Edmonton, and represents a potentially important longer-term opportunity for Shell to grow its In Situ business.
The right technology is key to unlocking the oil in Grosmont. Shell is currently testing a technology called the In situ Upgrading Process (IUP) as a possible technology for use at Grosmont. The IUP is a hydrocarbon recovery technology developed by Shell that heats the reservoir with electrical heaters to convert the heavy oil into lighter crude oil and gas while still underground.
Orion: Shell’s Orion project, which came on-stream in 2007, is located in the Cold Lake area and uses Steam Assisted Gravity Drainage (SAGD) to produce heavy oil.
Cold Production: Cold production can be used on areas of the reservoir where the bitumen is mobile enough to be pumped to the surface unaided by steam. The cold production concept uses long horizontal wells to pump the product to the surface without the aid of heat.
Cyclic Steam Stimulation (CSS): CSS is a thermal production technique, also known as steam soak or huff and puff. It is a form of well stimulation that involves heating the reservoir by periodically injecting steam into a production well and then giving it time to soak before the well is produced. Heat is injected to reduce the oil viscosity, thereby allowing it to be pumped to the surface through recovery wells.
Steam Assisted Gravity Drainage (SAGD): In SAGD recovery, two horizontal wells are drilled, one above the other. Steam is injected into the upper well. This heats the bitumen and allows it to drain to the lower well from which it is produced.
In situ Upgrading Process (IUP): From 2004 to 2011, Shell operated an In situ Upgrading Process (IUP) field test on a small portion of its Peace River leases. IUP is a Shell-patented technology that heats the reservoir with electrical heaters to convert the heavy oil into lighter crude oil and gas while still underground. The IUP pilot produced more than 100,000 barrels of light oil.
The purpose of this pilot was to test the recovery efficiency of the technology in an oil sands reservoir. The technology is still under development and Shell is currently evaluating next steps.
As part of Shell’s commitment to sustainable development we continually look for ways to use our resources efficiently. We try to minimize their use to reduce our costs and ensure the availability of the resource (whether it be water, land, energy etc.) for future generations.
The proposed Carmon Creek project at Peace River includes a number of environmental mitigation measures including produced water recycling, co-generation and acid gas disposal. The project is premised on not using any water from the Peace River during normal operations.
Total freshwater consumption for our in situ operations was 2.2 million m3 in 2011. This equates to about 2.2 barrels of fresh water for every barrel of bitumen produced. More than half of the water currently used by in situ projects in Canada is saline water from deep underground zones, not suitable for human or agricultural use (Source: Government of Alberta, Alberta’s Oil Sands).
In 2011, our in situ operations had an active footprint of approximately 1,800 ha. This total includes land used for production and test wells, pipelines, access roads and processing facilities.
For more information on Shell’s environmental performance see the 2011 Oil Sands Performance Report.
While the most significant opportunities we bring to the communities in which we operate are directly related to our operations, Shell also contributes to the general well being of the communities around our in situ operations.
In 2011, Shell contributed over $300,000 to the communities around its Peace River, Cold Lake and Grosmont operations, through our Shell Community Service Fund, FuellingChange and the United Way. Projects included donations of $5,000 to the Al Boomer Adair Rec Centre in Peace River and the Cold Lake First Nations Scholarship Fund and $2,500 towards reading materials for the Chipewyan Lake School’s literacy program. For more information on Shell’s social investment initiatives, visit www.shell.ca/community.