SAGD involves drilling two parallel horizontal wells, generally between 2,300 and 3,300 feet long, with about 16 feet of vertical separation. Steam is injected into the shallower well, where it heats the bitumen that then flows by gravity to the deeper producing well. The OrCrude™ technology, using distillation, solvent de-asphalting and thermal cracking, separates the produced bitumen into partially upgraded sour crude oil and liquid asphaltenes. By coupling the OrCrude™ process with commercially available hydrocracking and gasification technologies, sour crude is upgraded to light (39° API) premium synthetic sweet crude oil, and the asphaltenes are converted to a low-energy, synthetic fuel gas. This gas is available as a low-cost fuel source, and as a source for hydrogen required in the hydrocracker. The gas will also be burned in a co-generation plant to produce steam for the SAGD operations and for electricity to be used on-site and sold to the electric grid. The energy conversion efficiency for our Long Lake upgrader is about 90% compared to 75% for a typical bitumen-fed coker, which provides us with an estimated $10/bbl operating cost advantage. 

Our Strategic Advantage
Our SAGD and upgrading integration enables us to overcome three main economic hurdles of SAGD bitumen production:

1. the high cost of natural gas;
2. the cost of diluent; and
3. the realized price of bitumen.

With synthetic gas from the asphaltenes as a fuel source, we have little need to purchase additional natural gas. With the upgrading facilities on site,  expensive diluent is not required to transport the bitumen to market. And, by upgrading the bitumen into a highly desirable refinery feedstock or diluent supply, the end product commands light-sweet crude oil premium pricing.