A techno-economic assessment of bitumen and synthetic crude oil transport (SCO) in the Canadian oil sands industry: Oil via rail or pipeline?. (1st April 2017)

• Record Type: Journal Article
• Authors: Verma, Aman; Nimana, Balwinder; Olateju, Babatunde; Rahman, Md. Mustafizur; Radpour, Saeidreza; Canter, Christina; Subramanyam, Veena; Paramashivan, Deepak; Vaezi, Mahdi; Kumar, Amit
• Is Part Of: Energy. Volume 124(2017)
• Page Start: 665
• Page End: 683
• Publication Date: 2017-04-01
• Subjects: Pipeline transport -- Rail transport -- Cost -- Bitumen -- Synthetic crude oil -- Oil sands; Power resources -- Periodicals; Power (Mechanics) -- Periodicals; Energy consumption -- Periodicals; 333.7905
• DOI: 10.1016/j.energy.2017.02.057
• Languages: English
• ISSNs: 0360-5442

Abstract

Abstract: The growth in bitumen and synthetic crude oil (SCO) production in the Canadian oil sands industry has superseded pipeline capacity growth in recent years, leading to the increased interest in the transport of crude oil by rail to desired markets. However, the specific techno-economic parameters that facilitate increased competitiveness of either transportation mode against the other is seldom addressed in the existing literature. This paper involves the development of a rail and pipeline techno-economic transport model, which is used to ascertain the transportation cost of both options for a market distance range of 1–3000 km and a production scale of 100, 000–750, 000 barrels per day (bpd). The transportation cost for either option is highly sensitive to the market distance, transportation scale and crude grade being transported; however, pipelines are generally more competitive for large transportation scales, while the cost-effectiveness of rail transport is realized particularly at smaller transportation scales. In general, pipelines are cost efficient for the transportation of crude oil in the majority of scenarios investigated. Rail can be more economical than pipeline under certain conditions. The use of insulated rail cars for the transport of raw bitumen is the area with greatest potential for cost competitiveness against pipelines. Highlights: Techno-economic model for rail and pipeline transport of oil sands products. Pipelines are more cost efficient at large production scales than rail. At smaller production capacities, rail is more cost effective than pipeline. Raw bitumen transport in insulated rail cars can be competitive with pipelines.