With the Global Petroleum Show only two weeks away, it is time for an update on the oil and gas sector in Canada. Read on for a comprehensive report.
The Canadian oil and natural gas sector is developing and implementing innovative technologies to modernize the industry, improve efficiency, and reduce environmental impacts. With 185 projects underway, the 2018-2019 Canadian industry base-level maintenance spending continues. Innovation and leveraging new technologies are seen as critical factors for sustainable growth.
There will be a continued commitment to the Western Canadian Basin, with dollars flowing into drilling operations, production, and environmental solutions throughout the oil and gas cycle (from extraction to production to transportation).
Canada stands at a crossroads, with global opportunities hinging on investing in access routes to international markets. Oil and gas producers are balancing restrained capital investment with domestic uptake pressure through 2020, and increasing pressures in an environmental regulatory climate. Spending is expected to stay on track with $33.2 billion committed from industry operators.
Cost-cutting momentum will continue through 2018. Highlighted projects include:
- $10.2 billion maintenance slated for oil sands
- Needed technology and process improvements that reduce the economic and environmental cost of oil and gas operations
- Direct contact steam generation technology, which has the potential to reduce greenhouse gas (GHG) emissions for in situ oil production by 70 to 80 per cent, and the production cost per barrel by $2 to $8
- Autonomous and automated oil sands technology for improved performance, economics, and safety.
Expansion of Drilling Wells
The Canadian market is experiencing a five per cent increase in the number of new wells for 2018. The newly-minted Suncor Fort Hills and CNRL Horizon Phase 3 oil sands mining projects are ramping up their production into 2018.
Operators are putting resources into profitable wells, with new technology applications being sought for completion and drilling techniques to boost well production. Preferred technologies include extraction using solvents, which has the potential to eliminate the use of water in resource extraction, reduce GHG by 50 per cent, and reduce capital cost requirements needed to develop the resource by approximately 30 per cent.
Enbridge and TransCanada will continue to focus on reducing bottlenecks and adding capacity to existing pipelines. Opportunities for technology that improves pipeline monitoring and operation are also being sought. These would allow operators to easily detect cracks, dents, and other events or anomalies throughout the pipeline.
Approximately $30 billion of capital investment will flow into the Duvernay Shale and nearby Montney Basin. Major energy firms such as Chevron, Shell, and Encana are staking their claims thanks to abundance of oil and gas, and lower operational costs enabled by new horizontal fracking technology. Water management technology and technology that addresses environmental impacts and/or risks are also being sought.
Liquid Gas Market
The liquid natural gas (LNG) market is on track for four to five per cent growth in 2018. Investment in Canadian LNG outlets is also growing, due to increased domestic demands as well as increased exports to the U. S. market. Emphasis is also on technologies that enhance the environmental performance and effectiveness of the natural gas industry (including renewable natural gas, power-to-gas, and micro-combined heat and power technologies).
Decarbonisation regulations pressure oil and gas operators with target GHG emissions reductions. Innovations will be required to meet the carbon tax and GHG emissions targets. Some sought-after lower-emission products and innovations include the use of renewable energy as a power source for the extraction sectors, and hydrocarbon-based building products that could provide a lower-carbon-intensity substitute for cement.
Learn more about Canada’s oil and gas sector via the Canadian Association of Petroleum Producers’ two-part economic report.
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