There's oil in them there sands!


SAGD Modules: Built faster, lower cost		 Where will we look for future oil supplies? Not the Gulf, not under the Arctic sea, but in the friendly oil fields of northern Canada. The Alberta Oil Sands contain over 40 percent of the world's proven reserves, and Nordic Acres has technology to make it accessible.

Walking on oil

They used to be called the Tar Sands. That was when the only use for the sticky bitumen that oozed out of the ground was to caulk canoes and pave city streets. Now we know its true potential. Bitumen is oil. It may be hard, it may be mixed with sand and clay, but it is still oil, and the world needs it.

Various estimates of the potential of the Alberta Oil Sands have been made: the answer depends on the state of extraction technology at the time, and the state of the market. In the mid-80s we were told that proven reserves in the Oil Sands contain more petroleum than the entire conventional oil reserves in the Persian Gulf. One recent estimate is 300 billion barrels of oil. A current forecast is that by 2010 the Oil Sands will produce close to 2 million barrels a day. Plainly, they are a major natural resource which can only increase in value and importance as conventional wells approach the end of their life cycle.

Mining the sands

Large-scale commercial production from the Oil Sands began in 1968, using a combination of strip-mining and a hot-water process developed two decades earlier to separate the bitumen from the sand. The product was good, but the cost of production was high. Many other approaches to realizing the potential of the Oil Sands have been tried over the years, but uncertainty about inflation, interest rates and world oil prices inhibited large-scale development.

But today Oil Sands producers are ready to compete on even terms. A new technology is dramatically lowering the cost of extracting bitumen, and with a relatively low capital requirement is attracting new players.

Steam Assisted Gravity Drainage

The new technology is called Steam Assisted Gravity Drainage (SAGD, pronounced "sag-d"). It is an in situ process, designed to extract bitumen from deposits 100 metres and more below the surface. Hitherto the large producers have used surface mining techniques, which are confined to the relatively few areas where the deposits are close to the surface - about 3 percent of the total. One of the attractions of SAGD is that it opens up the entire Oil Sands area to development.

Another is that land disturbance is minimal. Because the bitumen is separated from the sand underground, the land surface remains intact, except in the location of the plant itself and its access corridors.

Nordic Acres, headquartered in Calgary, has played a key role in developing the SAGD concept for commercial use. It has overseen construction of a number of small-scale commercial prototypes and two pilot-scale plants, and in the process developed a modular approach which cuts both costs and construction time. Typically fabrication of modules begins when engineering is still in progress, reducing the time to build a commercial SAGD plant by at least six months.


The world's first SAGD plant at Alberta Energy Company's Foster Creek Location. For its work on this project, Nordic Acres Engineering won the 2002 Consulting Engineers of Alberta Award of Excellence (the top prize) in the Natural Resources, Mining and Industrial category.

Nordic Acres manages construction of first commercial SAGD plant

One of the pilot plants is a 2,500-BOPD facility at Alberta Energy Company's (AEC) Foster Creek location. Nordic Acres went on to manage engineering, procurement, and construction of Phase 1 of the world's first fully commercial SAGD plant, at the same location. With cogeneration part of the process, operating costs are expected to be less than $5 per barrel. At startup, early in 2002, production is expected to quickly reach 23,000 barrels per day. Three more phases remain to be built, for an eventual output of 100,000 BOPD.

A breakthrough technology

The success of the SAGD process is based on two relatively new technologies - the use of steam to raise extraction rates, and horizontal drilling. In a typical SAGD application, a pair of horizontal wells are drilled into the oil sand deposit, one above the other. Steam is fed to the upper of the two wells. The steam penetrates the sand/bitumen mixture and heats the bitumen to mobilize it. As the steam cools it condenses, water fills the spaces between grains of sand, and drains away under the force of gravity, carrying the liberated bitumen with it. The water/bitumen mixture collects in the lower of the two horizontal wells, from which it is pumped to the surface.

Because the oil sands deposit is covered with a heavy overburden, the heat of the steam cannot escape upwards; close to 100 percent of the heat injected is absorbed by the oil sands. In a typical site between two and three barrels of water, in the form of steam, are needed to produce one barrel of oil. Most of the water is recycled, over and over again.

SAGD is a true breakthrough technology which is expected to transform commercial production in the Alberta Oil Sands. With SAGD the Oil Sands will be able to compete on level terms with global producers, giving a new lease on life to the Canadian oil industry.

For more information about Nordic Acres SAGD or any other of the company's wide range of oil and gas engineering services contact Mike Theilgaard at:
Tel: (403) 292-0370; Fax: (403) 292-0377; Email: mtheilgaard@acres.com.

Visit us at www.acres.com.