​Cenovus applies for 190,000-bbl/d diluent recovery unit at rail terminal

Image: Canadian Energy Regulator

Cenovus Energy has filed for regulatory approval of plans to build a large diluent recovery unit (DRU) at its Bruderheim Rail Terminal, allowing it to ship more oil out of Alberta.

The Alberta Energy Regulator announced the application on Friday.

Documents describe a DRU that would separate up to 190,505 bbls/d of diluted bitumen, or dilbit, delivered by pipeline from the company’s oilsands projects into undiluted “neatbit” and diluent components.

Approximately 119,000 bbls/d of neatbit would be shipped by rail to markets, while approximately 71,000 bbls/d would be recycled back via pipeline to the company’s oilsands operations.

Using that ratio of products, the 64,773 bbls/d loaded at Bruderheim in Q3/2019 would have included about 23,000 bbls/d of diluent lost into refining markets.

DRU development has recently gained momentum as an opportunity to reduce diluent requirements and free up egress space out of Alberta.

On December 3, Gibson Energy announced a joint venture with ConocoPhillips to build a DRU at Gibson’s Hardisty Terminal, with ConocoPhillips contracting 50,000 bbls/d of inlet bitumen blend. Gibson said it is also in commercial discussions with other potential producer and refiner customers for an additional 50,000 bbls/d of processing capacity, and the facility could be placed into service as early as 2021.

Capital cost estimates have not been disclosed by either Gibson or Cenovus.

Cenovus spokeswoman Sonja Franklin said the company is conducting “an investigation into the feasibility of a DRU and the value such a project could add to our portfolio in a congested transportation market.

“Building a DRU is being considered as part of our market access strategy because it would increase the volumes of potentially higher-value oil that can be sent in each rail car, helping to reduce transportation costs,” Franklin told JWN via email.

“Shipping oil-by-rail provides us with more options for transportation and marketing, and helps alleviate the challenges associated with the lack of pipeline capacity.”

The company told the Alberta Energy Regulator its proposed DRU plant has an anticipated life of 40 years, with a projected start in the fourth quarter of 2023.

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