Transportation and Facilities

 

Transportation and Facilities

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This section provides an overview for transportation and facilities:

Figure 9.1

  • The AER regulates over 431 000 kilometres of pipeline in Alberta, including about 12 000 km of Alberta Utilities Commission (AUC) natural gas utility pipelines for which the AER conducts surveillance and inspections, incident response, and investigations because of a memorandum of understanding with the AUC.
  • Oil and gas pipelines that cross provincial or federal borders are regulated by the National Energy Board.
  • Pipeline gathering systems lower transportation costs, reduce truck traffic on roads and leases, and generate fewer safety and environmental concerns over handling the product.

As shown in Figure 9.1 [Tableau], the infrastructure needed to support the development of Alberta’s vast energy resources involves networks of oil and gas pipelines, railroads, roads and highways, and electricity transmission lines.

Pipelines

Thousands of kilometres of transportation infrastructure are needed to connect Alberta’s energy resource commodities to markets both inside and outside of Alberta. A network of pipelines has been built solely to transport energy resources. Other infrastructure, such as railroads, roads, and electrical lines, is shared with other industries and individual Albertans.

Alberta’s intraprovincial pipeline system is highly integrated and includes gathering, transmission, and distribution lines that transport hydrocarbons from the producing areas to major distribution and processing centres that operate within the province’s borders. Removal pipelines are typically long-distance, higher-capacity pipelines that carry hydrocarbons to markets outside of Alberta.

Oil Pipelines

In Alberta, most oil gathering pipeline systems deliver oil to two central locations: Edmonton and Hardisty. At Edmonton, crude pipelines can deliver the oil to refineries within the province or, for removal, to Enbridge Inc.’s Mainline system heading east or Kinder Morgan’s Trans Mountain pipeline heading west. At Hardisty, crude can enter Enbridge’s Alberta Clipper pipeline for delivery to eastern parts of Canada and the United States or Spectra Energy’s Express pipeline for delivery to the U.S. Rocky Mountains.

As heavier crude oil is unable to flow through pipelines because of its high viscosity, it is typically mixed with a diluent or in limited cases transported through a heated pipeline. Condensate and upgraded bitumen are two main types of diluent used to lower the viscosity of raw bitumen for transport in pipelines, although naphtha, light crude oil, and butanes can also be used to enable the bitumen to meet pipeline specifications. The ratio of diluent required will depend on the viscosity of the crude and the type of diluent being used. Condensate is lighter than upgraded bitumen as a diluent, which means a smaller volume of condensate is required to move bitumen through a pipeline. On average, a blend of bitumen and condensate will contain about 30 per cent condensate, whereas a blend using upgraded bitumen will contain up to 50 per cent upgraded bitumen to meet pipeline specifications. Typically in Alberta, a small pipeline will transport condensate into the field and a larger pipeline will transport the mix of heavy crude and condensate to a refinery, where the condensate is usually recycled. However, when the condensate and bitumen mix is transported to markets outside Alberta, the condensate may be used as feedstock for refineries, although portions are recycled and sent back to the province.

Natural Gas Pipelines

Natural gas is transported from the wellhead by a gathering system to field processing plants. Field plants, typically located near the source of the gas, ensure that natural gas meets the quality specifications of the natural gas pipeline systems, which may require removing natural gas liquids (NGLs) to meet pipeline dew point specifications. Other contaminants, such as water and hydrogen sulphide, must also be removed. NGL extraction beyond what is needed to meet dew point specification may also occur to obtain full value for the NGL components.

Once impurities are removed and the natural gas meets pipeline specifications, the natural gas is compressed before entering a large transmission pipeline. Under compression, natural gas flows through the transmission system from areas of high pressure to areas of low pressure. Once natural gas reaches end markets, local distribution companies reduce the pressure for local delivery distribution networks.

Railroads

North America’s railroad network is extensive, linking almost all major cities and ports across the continent. This interconnectedness allows not only movement across borders, but also across markets. While pipelines offer shippers the ability to only access certain markets, rail allows producers to place their product on cars and ship it almost anywhere on the continent. Demand for unit trains, which generally consist of 100 dedicated tanker cars, has grown rapidly in recent years as oil producers have sought out additional transportation options.

Alberta’s existing railroad system crosses major oil and NGL-producing regions in the province. Transloading facilities in the province include pipeline-connected storage hubs and rail terminals. The railroads connecting Alberta to ports in British Columbia have been previously strengthened to transport large unit trains of coal and other commodities.

Canada’s major railway networks are owned primarily by Canadian Pacific Railway (CPR) and Canadian National Railway (CN).

Plants and Facilities

The downstream sector of the oil and gas industry refines crude oil or crude bitumen and processes raw natural gas, as well as markets the refined products. Alberta produces an array of different marketable energy commodities, such as propane, butanes, diesel, naphtha, and gasoline.

Upgraders

To improve the quality of crude bitumen, upgraders chemically alter the bitumen by adding hydrogen, removing carbon, or both. An upgrader is an oil sands processing plant that upgrades bitumen into lighter hydrocarbon products. The AER regulates upgraders as "processing plants" under the Oil Sands Conservation Act and as "oil sands processing plants" under the Environmental Protection and Enhancement Act. In upgrading, most of the sulphur and other impurities contained in bitumen are removed. The bitumen upgrading process produces off-gas that is high in NGLs and olefins. The off-gas has primarily been used as fuel in oil sands operations; however, increasing volumes of off-gas are being processed to remove NGLs and olefins, which are used as feedstock in the petrochemical industry. Sulphur is either stockpiled or shipped to facilities that convert it to sulphuric acid, which is mainly used to manufacture fertilizers.

Natural Gas Processing Plants

Ethane and other NGLs are recovered mainly from natural gas processing. Gas reprocessing plants, often referred to as straddle plants, recover NGL components or NGL mix from marketable gas. They are usually located on main gas transmission pipelines at border delivery points.

Straddle plants remove much of the propanes plus (C3+) and ethane volumes, with the degree of recovery being determined by the plant’s extraction capability, contractual arrangements, and product demand. Field plants may send recovered NGL mix to centralized, large-scale fractionation plants where the mix is fractionated into specification products such as propane, butanes, and pentanes plus. A de-ethanizer tower, along with a turbo expander, chills the natural gas to isolate ethane from other NGLs.

Ethane recovered at field processing plants, NGL fractionators, and straddle plants is shipped on the Alberta Ethane Gathering System to the Alberta ethane market, mainly the petrochemical sector.

Alberta’s petrochemical industry is the major consumer of ethane, which is used to produce ethylene and polyethylene. Ethylene is one of the building blocks in producing products such as packaging material, ethylene glycol, and styrene. The petrochemical industry also produces many other products, such as fertilizer.