China's Sinopec Wants Two-Fifths of Northern Lights Oilsands

[Robbien]

CALGARY (CP) -- A major Chinese oil company is paying C$105 million to buy a minority stake in an oilsand project in northeastern Alberta, the latest strategic investment by China in the rapidly expanding Canadian oilsands sector.

In a deal announced early Tuesday, SinoCanada, a subsidiary of China-based oil giant Sinopec Group, will buy 40 per cent of the Northern Lights oilsands project from Synenco Energy Inc., a private Calgary-based company.

''My sense is Asia, along with every other region of the globe, has recently begun to pay attention to the oilsands,'' Jim Donnell, president and chief executive of Synenco, said in an interview. ''I think the oilsands has come of age, so to speak, and the sector produces a million barrels a day currently and over the next eight to ten years it's forecast to go to two million barrels a day,'' he said.

Synenco said it will keep a 60 per cent interest in the new partnership and operate and act as managing partner of the project, which is estimated to cost C$4.5 billion over the next five years to develop.

http://www.resourceinvestor.com/pebble.asp?relid=10187

[bemildred]

1. This will be very good for natural gas. nt

[Tempest]

2. It will cause the price of natural gas to go up

The plants are run on natural gas.

[bemildred]

3. Yep. nt

[achtung_circus]

4. They are shutting off gas wells

in Northern Alberta in order to maximize the oils sands.

Or at least they were when I left in 2001.

Something about pressures, but I'm no geologist.

[bemildred]

8. What I have read ...

1.) That NG supplies in N. America are "tight"
2.) That "oil sand" conversion uses lots of NG
3.) They are drilling all over the intermontane West looking
for methane etc.
4.) Oil demand is outstripping supply

Your comment does not make it less likely that this is
"good for NG".

And NG stocks and funds did rather well last Winter.

What I read about "oil sands" is that it's really sort of tar
with sand and gravel and stuff mixed in, way more of a problem
than "heavy oil", and that it takes a good deal of NG to
turn it into something useful. I would be interested to see
numbers for calories in vs calories out.

But in the meantime, if the shortsighted half-wits that run our
affairs intend to try to use oil sands as an energy source, or even
to pretend to use it, it likely means the price of gas will go
up a lot.

[achtung_circus]

10. When you think of oil sands

think of asphalt, without the rigidity.

That petroleum component is cooked off the mineral component. It's moved by pipeline to Edmonton, primarily the Shell Scotford refinery and refined.

I don't remeber the details, but the Alberta Energy Board AEB was reguiring gas wells in the vicinity to be shut off to ensure easier extractability of the oil. This remnoves NG from the supply and drives the price higher.

[CHIMO]

12. Athabasca Gas Shut In

In a recent decision (GB 2003-28), the Alberta Energy and Utilities Board (EUB) decided to restrict gas production in the Fort McMurray area to maximize bitumen recovery. Following a review this past summer, approximately 630 wells have received exemption from the shut in order, leaving approximately 300 wells still shut in, as of October 31, 2003. In addition to the impact on area producers, GB 2003-28 has also affected the TransCanada Alberta System:

http://www.transcanada.com/Customer_Express/Update/november_2003/article_3.html
There is some more info at the site.

Note that the pipeline from Alaska will most likely be capable of supplying the required NG for the Oils Sands. Otherwise pipe it down south and then pipe it up north again. Don't matter much to the owners, as royalties are a function of profits in quite a lot of cases. So if it costs more for the gas, well the company just makes a bit less and proves that they need more handouts from governments.

Another item that is not being looked at is water consumption. Flying under the radar. I was looking for the reference but can't find it but to the best of my memory it takes between two and a half barrels to four barrels of water for each barrel of oil.

There are a lot of variables that none is considering when they consider oil sands like a barrel of oil flowing from the ground.

[hatrack]

13. It's closer to four bbl water for each bbl synthetic oil

If you fully exploited the Athabascan formation, it would result in a pond of wastewater & oil 20 feet deep with a surface area equal to half of Lake Ontario.

And that's assuming that Edmonton, Calgary and the remainder of the people in Alberta would permit total committment of the province's surface water to tar sand development.

[CHIMO]

14. As

I said I was going from memory.Also one should also consider that quite a bit of that water is like a once through process.
Thanks for the correction.

[achtung_circus]

15. I'd like to apologise for this sentence.

I don't remeber the details, but the Alberta Energy Board AEB was reguiring gas wells in the vicinity to be shut off to ensure easier extractability of the oil. This remnoves NG from the supply and drives the price higher.

By the time I noticed the atrocious spelling, the edit time had expired.

[daleo]

5. It is reverse alchemy

The process essentially turns clean natural gas into dirty oil sands oil. The current way of doing things makes little sense.

[applegrove]

6. Oh my the WH must be mad. That 's what happens when you bully

your neighbors and sign trade deals only to reneg on them. Called diversification. Aside from the fact that those poor Albertans will live beside the biggest stove top in the world (boiling oil no less) - Canada has fears about the US and their policy (as represented by the Harper neocons) of wanted to share all that we have with them.

I'll share with Bush as soon as his family starts sharing with me. NO! I'll share with Bush when his family starts sharing with Americans.

[geckosfeet]

7. China is going to own us in 20 years.

[BeHereNow]

9. I bought Canadian oilsands stock two years ago-

It has more than doubled since I bought it.
Wishing I had bought more...
BHN

[Canadian Socialist]

11. Of course there is one little problem...

http://www.cbc.ca/story/business/national/2005/04/28/pipeline-050428.html

Oil companies stop work on Mackenzie Valley pipeline
Last Updated Fri, 29 Apr 2005 12:47:16 EDT
CBC News

CALGARY - The oil companies behind the $7-billion Mackenzie Valley natural gas pipeline announced Thursday they had stopped most work on the project, saying there hasn't been enough progress in resolving several key issues, including access.

The pipeline partners said they remain committed to the project, but said progress has been so slow on bridging some differences that they are unwilling – at least for the time being – to commit more money.

<snip>
Could put a crimp in the oilsands project. Just saying. There is more background on the cbc.ca site, if you're interested.

[BeHereNow]

16. Thanks!

Good site to know about...
I will keep an eye on it.
I have been thinking about getting out
while the gettin' is good, no need to be greedy.
Its good to have this addtional information-

BHN