Conventional Heavy Oil
PROJECTS
Thermal Solvent Process

VAPEX Engineering and Economics

Progressing Cavity Pump Run-Life

Coiled Tubing

Environmental
AIR
Successful Flaring Workshop

Natural Gas Losses Project a Go

SOIL
Soil Remediation, Site Restoration and Groundwater Workshop

Soil and Water Quality Guidelines Project

ECOLOGY
Arctic Ringed Seals Project

PTAC News
PTAC Welcomes New Members

Join PTAC

May 2000 - Issue 14

R&D Success Factors
Key Success Factors in Launching Joint Industry R&D Initiatives

The following is excerpted from the address given by Richard Luhning, Director of COURSE (Coordination of University Research for Synergy and Effectiveness), at PTAC’s recent Annual General Meeting.

Joint Industry Projects (JIPs) for the development of technology through research and development are a popular mechanism to share the cost and risk involved. There are a wide variety of mechanisms to operate such joint projects, but all of them must first face and overcome the challenge of being successfully launched.

Experience has shown that there are three major success factors in launching new initiatives. These are:

A Solid Project Proposal for a JIP

The ideal project for a JIP is one which:

• Addresses a problem or opportunity which spans a broad sector of the industry;
• Is pre-competitive in nature yet has already moved along the research S-curve; and
• Can achieve meaningful results in about a year.

The project should have, or study the potential for near-term, economic commercial success. It is critical that the research proposal meets the needs of those that will be asked to provide the funding. The funding will come mainly from industry companies and in many cases from government.

The Tradition of JIPs in the Energy Industry

The energy industry is blessed with a strong history of technological advances moving rapidly to commercial success. There is, however, a well-established tradition for the JIP business terms. The tradition calls for the following:

• A small monetary subscription fee for a big technological benefit. Currently the range is about $20k-$30k per participant, resulting in significant leverage, usually in a project valued between $100k-$300k;
• A one-year commitment is most popular; and
• The provision of technology use rights for participants.

Providing an Organized Proposal to the Right People

Organization

Selecting the most prospective project and formulating the business proposal, will typically take in the range of 2-3 months to arrive at the third and final stage, which is – Getting the Proposal to the Right People. This used to be a daunting task, until the advent of PTAC, CONRAD, COURSE and others which have the objective of bringing industry and researchers together to consider JIPs for technology development. There is no question that the convenience of these organizations has accelerated the formation of JIP initiatives by orders of magnitude. This is a major contribution to success.

Presentation

When the right people are assembled to receive the proposal to launch a JIP, it is critical to provide the information needed to make a decision to move to the next stage. The invitation and presentation should include: a descriptive title, names of organizations involved, brief background, project goal/scope, project cost and participation fee, and the benefits of participation. A definite next step, such as the plan to provide additional details to those seriously interested, should be clearly provided at the close of the meeting.

In opening and closing your information session to launch a new JIP, recall that people remember the first thing and the last thing. Make sure these are the same and the most important points. Above all, the process should be simple, enjoyable and rewarding for all involved.

Contact: Richard Luhning
Director of COURSE
phone: (403) 268-7553
luhningr@cadvision.com

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Conventional Heavy Oil

PROJECT
Thermal Solvent: Engineering and Economics

The "Thermal Solvent Process - Full Scale Engineering and Economics " joint industry research project was initiated by Suncor Energy Inc. and launched through PTAC in 1999. The project has been successfully completed with a total of 10 participants.

The thermal solvent process uses a combination of moderate reservoir heating and gaseous solvents to promote recovery for in situ oil sands bitumen recovery by reduction of viscosity and in situ upgrading. Greenhouse gas emissions are greatly reduced through a combination of CO2 sequestration and reduced reservoir heating.

Plans for continued fundamental, joint industry research are under con-sideration by the current participants.

Contact:
Richard Luhning
Arkril Enterprises
phone: (403) 268-7553
luhningr@cadvision.com

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PROJECT
VAPEX Engineering and Economics

As a result of the research project that was started in 1998 through PTAC, the world’s first twin horizontal well VAPEX field pilot is being advanced in the Athabasca Oil Sands. Further details will be announced at a later date.

Phase 2 of the project (1999/2000), operated by the Petroleum Research Institute (PRI), has been successfully completed with a total of 24 participants from Canada, USA, Japan, France, Cuba, and Argentina. The VAPEX process is a non-thermal recovery method which uses gaseous solvents to increase oil recovery by reducing oil viscosity, in situ upgrading and pressure control. The joint industry work in Phase 1 (1998) and Phase 2 (1999) of VAPEX Engineering and Economics, studied recovery from oil sands and heavy oil with a combined cost of about $1 million. Both oil sands and heavy oil promise economically attractive oil recovery by the VAPEX process with greatly reduced greenhouse gas emissions.

Future plans are under consideration to have a VAPEX Engineering and Economics project specifically for heavy oil recovery in Saskatchewan and Alberta, which is also expected to lead to field piloting.

Contact: Richard Luhning
Arkril Enterprises
phone: (403) 268-7553
luhningr@cadvision.com

Blaine Hawkins, PRI
phone: (403) 210-5249

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PROJECT
Progressing Cavity Pump Run-Life Improvements

In February of this year, C-FER Technologies Inc. launched a Joint Industry Project (JIP) that was initiated in July of 1998 through a Request for Proposal (RFP) issued by a group of heavy oil operators and PTAC. This initiative was the result of a PTAC mini-workshop entitled "Workover Cost Reduction." During the workshop, several heavy oil operators noted that:

• Progressing cavity pumps (PCP’s) are used extensively in the conventional cold production of heavy oil, and PCP’s have provided an effective means of producing sand-laden heavy oil;
• Nevertheless, the run-life of PCP’s in these applications tends to be relatively short (3-18 months); and
• The resultant equipment replacement and servicing costs contribute significantly to the operating costs of heavy oil developments (estimated annual operating cost to the industry in excess of $50 million).

The main objective of this JIP is to acquire an improved understanding of the key failure mechanisms that are responsible for the variability in pump life. This will be achieved through a combined field data gathering and synthesis effort followed by comprehensive analysis work using the data. Based on the information collected, the project will also examine the possibility of achieving a substantial run-life improvement through the implementation of better failure tracking systems, equipment changes or operational practices (e.g. pump selection (model type, materials), lower speeds, target fluid levels, etc.), or use of pump-off control systems. Once this knowledge has been acquired, various alternative solutions will be identified to evaluate their potential effectiveness in mitigating pump failures. 

The current participants in this initiative include AOSTRA, Chevron Petroleum Technology Company, Crestar Energy Inc., Husky Oil Operations Ltd., Petrovera Resources Inc., Texaco Inc., and Wascana Energy Inc.  Contact: Todd Zahacy C-FER Technologies Inc.  phone: (403) 450-8989 ext. 240 t.zahacy@cfertech.com Francisco Alhanati C-FER Technologies Inc.  phone: (403) 450-8989 ext. 253 f.alhanati@cfertech.com BACK TO TOP

PROJECT
Evaluation of Coiled Tubing Serviceability for Sour Service Applications

The many advantages associated with using coiled tubing (CT) for sour service underbalanced drilling and sour well servicing operations are well recognized within the Canadian oil and gas industry. However, very little knowledge exists regarding CT failure mechanisms and performance limits with exposure to sour service conditions. This has led to severe regulatory restrictions placed on the use of CT for sour well under-balanced drilling in Alberta. In addition, recent field experience suggests that a number of early failures of CT strings used for well completion and servicing operations may be attributed to exposure to sour conditions. 

C-FER Technologies Inc. is pleased to announce that a JIP has been initiated to address the issue of CT performance and service life under sour conditions. A unique experimental program has been developed in conjunction with several key industry players which will serve to quantify coiled tubing damage and failure caused by the synergistic effects of fatigue-corrosion combined with hydrogen induced damage mechanisms. A series of tests will be completed using full-scale CT specimens under loading conditions representative of the cyclic straining of the tubing material during reeling/unreeling operations and environmental conditions, which cover a range of sour service applications.

The joint industry project was officially launched in March, 2000 with five industry participants including: Halliburton, PanCanadian, Petro-Canada, Nowsco and Shell. The Steering Committee representatives from these companies collectively bring a wealth of materials and CT operations experience to the project to ensure it will be guided effectively to meet industry needs. The project remains open to participation by other operating and service companies. 

For further information, please contact:
Cam Matthews
C-FER Technologies Inc.
phone: (780) 450-8989 ext. 252
c.matthews@cfertech.com

Example of brittle failure of a coiled tubing specimen with exposure to sour conditions.

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Environmental

Air

WORKSHOP
Flaring Workshop a Success

Over 60 representatives from industry and government attended PTAC’s 2000 Flaring R&D Workshop in April. Four workshop break-out groups addressed flaring R&D goals, needs, priorities and direction required for the future, based on the results to date of past and ongoing R&D. Summary notes from the workshop can be found on PTAC’s website at www.ptac.org/environmentwork.html.

The next major step will be the formulation and issue of Request for Proposals (RFPs) later in May 2000 for the specific R&D that potential supporters are prepared to fund.

Should you be interested in supporting or participating in flaring R&D, please contact:
Tannis Such, PTAC
phone: (403) 218-7703

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PROJECT
Natural Gas Losses Project Proceeding

PTAC is pleased to confirm that the Natural Gas Losses Project proposed by Clearstone Engineering Ltd. and GRI is proceeding with a number of producers and at least 22 facilities to be surveyed during 2000. This project is a follow-up to the successful Fugitive Emissions Project facilitated by PTAC during 1998-99.

The objective of this project is to further refine and demonstrate the merits and limitations of conducting formal surveys to identify cost-effective natural gas and process gas emission-control opportunities at upstream oil and gas facilities. This is seen as an opportunity to achieve sensible and verifiable reductions in greenhouse gas (GHG) emissions, as well as a noteworthy financial opportunity for industry. The project still has room for additional producers that wish to have their facilities surveyed. Facility specific survey results will be provided to respective facility operators and owners only.

CAPP ERAC and others will be providing funding to conduct a comprehensive analysis of survey findings in order to provide industry and government with estimates on the industry-wide potential for economic GHG reduction opportunities.

For technical and survey cost information for your facilities, please contact:
David Picard, Clearstone Engineering Ltd.
phone: (403) 215-2730
david.picard@clearstone.ab.ca

For a copy of the project proposal or general information, please contact Tannis Such of PTAC.

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PROJECT
Flaring Fate and Transport Project (Phase 1)

This project received co-funding from Environment Canada and the Saskatchewan Research Council, in the amount of $50,000 from each institution, to complete a research project focussed on Flaring Fate and Transport (Phase 1) by May 31, 2000. The project (Phase 1 only) will examine in more detail the ambient air quality from flaring operations primarily associated with the upstream oil and gas industry in Western Canada.

The following goals were the main focus of the study:

1. To investigate past and current research activity with a focus on field monitoring of the effects of flaring fate and transport combustion on the environment.
2. To develop a summary of interactions with knowledge gained by the information discovered and with contacts in the field.
3. Write a final report with recommendations for the in-field monitoring component of this project (Phase 2).

The research program is being developed to meet the objectives in three phases, including: a literature review monitoring project plan; the field component of a monitoring project; and finally, the ecological implications of the findings to flaring in Western Canada.

In Phase 1, a literature review is being conducted on past activities around the world on the topic of air pollution and flaring. The new technique of open path monitoring is one of the areas of focus for this project along with others including monitoring ambient carbon particulate within the atmospheric environment.

The Phase 2 component is essentially a field scale-monitoring project with technologies identified in Phase 1. The focus will be on both trace gases and particulates that will be identified as emission products from the flare.

Phase 3 is an assessment of results from Phase 2 with particular emphasis on the long-term accumulation potential of the products identified. It is proposed that in Phases 2 and 3, flare emission from various facilities and monitoring the atmospheric environmental impact from a flare on a regional basis, will continue for a minimum period of 2 years.

If you are interest in this project as a potential funder or would like additional information, please contact:

Dr. Stan Shewchuk
Atmospheric Processes Section
Environment Branch
Saskatchewan Research Council
phone: (306) 933-5437
shewchuk@src.sk.ca

Doug Soveran
Process Development Branch
Saskatchewan Research Council
phone: (306) 787-9331
soveran@src.sk.ca

Keith Wallace
Atmospheric Processes Section
Environment Branch
Saskatchewan Research Council
phone: (306)933-8120
wallace@src.sk.ca

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Soil

UPCOMING WORKSHOP
Soil Remediation, Site Restoration, and Groundwater Workshop

PTAC is hosting a Soil Remediation, Site Restoration and Groundwater R&D Priorities Workshop on May 25th, 2000. This workshop will focus on new R&D needed by industry, regulators, and the public. This a full-day workshop and will provide opportunities to provide input into future R&D needs and priorities, learn how the results of these projects may change the direction of future research, and to get involved in current or planned research projects of interest to your company or organization.

For further information or to register for this event please contact:
Tannis Such, PTAC
phone (403) 218-7703

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PROJECT
Shell Launches JIP Project to Develop Soil and Water Quality Guidelines for Sulfolane and DIPA

PTAC is pleased to announce that Shell Canada Limited has launched a joint industry/government project, funded by industry and endorsed by CAPP, to develop soil and water quality guidelines for sulfolane and diisopropanolamine (DIPA). The R&D provider is Komex International Inc. in association with Cantox Inc. and Scientific Information Services. Sulfolane and DIPA are unregulated compounds used in the Sulfinol process for the treatment of sour gas. These compounds have been used at sour gas plants since the 1960s. These compounds have been detected in soil, groundwater, and surface water at some facilities where they have been used. Currently, no federal or provincial soil or water guidelines exist for sulfolane or DIPA. The proposed work will provide a scientifically defensible set of soil and water quality guidelines for these compounds. The guidelines will assist in decision-making for site assessment and remediation planning. The Technical Steering Committee (TSC) includes representatives from industry, federal and provincial regulatory agencies, and the municipal health authority. Project goals developed by the TSC specify that the guidelines must:

• Be consistent with protocols developed by the Canadian Council for Ministers of the Environment. They must be applicable to sites in Alberta and British Columbia with a view to federal endorsement.
• Be developed with regulatory and stakeholder endorsement and be fully protective of human health and the environment under current and future land use scenarios on any property.
• Identify appropriate receptors, recognize multimedia and multipathway exposures, and be based on good science, sound principles, and scientific defensibility. The basis for the guidelines must be clearly presented, with assumptions, shortcomings of available data, and data gaps identified.
• Be clearly presented such that they can be used to measure and confirm remedial performance. They must lead to clear land and water use options for ongoing risk management decisions.

Contact: Jan Gayle
Shell Canada
phone: (403) 691-4939
fax: (403) 691-2224
janis.gayle@shell.ca

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Ecology

PROJECT
"Every Move that you Make" Tagging and Tracking Ringed Seals in the Western Arctic

In 1999, four ringed seals were captured, fitted with satellite-linked transmitters and released near Holman, NT, in Canada’s western Arctic. The comings and goings of these seals were monitored via the ARGOS satellite system through summer, fall and winter 1999/2000. Transmissions cease when the batteries are drained or when the tag falls off during the spring moult, whichever comes first. This first year of the study revealed exciting new information about the travels and behaviour of these seals, while they were among both ice-free and ice-covered waters of the Beaufort Sea, Amundsen Gulf and Viscount Melville Sound. The most remarkable journey was that of a male who traveled over 1000 km over the course of the summer, presumably for feeding, and then retraced that same 1000 km back to the tagging site when fall was approaching. Never before has such a pattern been documented.

Related work, spanning several decades, has revealed that the condition and reproduction of the ringed seal varies and reflects broad-scale changes in ecosystem, such as heavy or light ice conditions. Continued research on this important species will play a role in our preparedness for renewed oil and gas exploration initiatives in the Western Arctic. The Fisheries Joint Management Committee, the Department of Fisheries and Oceans, and World Wildlife Fund Canada, funded the first year of the work. Funding partners are actively being sought to continue and expand this exciting new project.

For more information, contact:
Lois Harwood
Department of Fisheries and Oceans
Box 1871, Inuvik, NT X0E 0T0
harwoodl@dfo-mpo.gc.ca

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PTAC News

Join PTAC
Reap the R&D Benefits

If you find PTAC’s facilitation of collaborative research and technology development in the conventional oil and gas industry of value to you, we encourage you to join our organization, or renew your existing membership. By doing so, you will ensure PTAC has the resources to continue fulfilling our role. PTAC has facilitated the launch of 56 projects valued at $11.6 million. Several PTAC facilitated projects have led to significant field pilot projects in heavy oil/bitumen reservoir recovery. PTAC’s growth continues, with an ever increasing number of members and launched projects, as a result of the utilization of our services by the oil and gas industry.

If you are interested in becoming a PTAC member, please contact:
Arlene Merling, PTAC
phone: (403) 218-7702
fax: (403) 920-0054

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New Members
147 PTAC Members

34 organizations and individuals have joined PTAC since January 1, 2000 bringing our membership to a total of 147. We welcome the following organizations and individuals that have joined PTAC since March of this year.

Service and Supply Companies

• Boreal Laser Inc.
• Colt Engineering – Core Resources Group
• Engineering Seismology Group Canada
• Fire Creek Resources Ltd.
• Halliburton Energy Services
• Komex International Ltd.
• Lionhead Engineering & Consulting Ltd.
• Northridge Canada (1998) Inc.
• Sanjel Corporation – Engineering and Tech. Services
• Wireless Matrix Corporation

Individuals

• Century, Jack
• Driedger, Dirk
• Maier, Len

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PTAC is dedicated to the facilitation of collaborative Research and Technology Development for the Canadian conventional upstream oil and gas industry.

PTAC is a not-for-profit association governed by a volunteer board of directors made up of representatives from producers, service and supply companies, research and educational institutions, inventors and government.

P-talk is published quarterly and is available through PTAC. Material may be reprinted without permission but credit would be appreciated.

Contact Us
For further information please contact PTAC

PTAC
Petroleum Technology Alliance Canada

25th Flr., One Palliser Square
125 - 9th Ave. S.E.
Calgary, Alberta T2G 0P8
website: www.ptac.org
fax (403) 920-0054

Eric Lloyd
President
phone: (403) 218-7701
e-mail:

Arlene Merling
Director, Operations
phone: (403) 218-7702
e-mail:

Tannis Such
Project Coordinator
phone: (403) 218-7703
e-mail:

Kerri Markle
Project Coordinator
phone: (403) 218-7711
e-mail:

Lorie Frei
Administrative Assistant
phone: (403) 218-7700
e-mail:

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© 2000 PTAC