26-09-2012

Williams signs new agreement to provide gas processing in Canada's oil sands

Williams announced today that the company has signed a new long-term gas processing agreement with a producer in the Canadian oil sands.

Under the new long-term agreement, Williams will extract, transport,  fractionate, own and market the natural gas liquids (NGLs) and olefins recovered from the offgas at the oil sands producer's upgrader near Fort McMurray, Alberta. Under the agreement, the NGL/olefins recovered are  expected to be approximately 12,000 barrels per day (bpd) by mid-2015 and growing to approximately 15,000 bpd by 2018. 

The NGL/olefins mixture will be fractionated at Williams' Redwater  facilities into an ethane/ethylene mix, propane, polymer grade propylene, normal butane, an alkylation feed and condensate. The ethane price risk associated with this deal is mitigated via the previously announced long-term agreement to supply NOVA Chemicals Corporation with up to 17,000 bpd of ethane and ethylene. 

The propane recovered will be sold into the local propane market and would potentially be used as feedstock at Williams' proposed propane dehydrogenation (PDH) facility in Canada. The other products will be sold into the established markets where Williams sells existing  NGLs and olefins produced in Canada. 

"This new agreement will build on the unique expertise and large-scale infrastructure we've built in Canada," said David Chappell, president of Williams Energy Canada. "The scale that we are building here with fractionation, distribution and storage gives us the ability to generate significant long-term incremental value from our operations. 

"The new operations will also further reduce greenhouse gas and sulphur dioxide emissions from the upgraders' oil sands operations, and produce  valuable commodities that were previously being burned," Chappell said.

Emissions Reductions
The offgas processing that Williams pioneered significantly reduces emissions at its customers' oil sands production facilities. Williams captures and processes a rich NGL/olefins mixture that would normally be burned by the oil sands producer. The producer instead burns methane that Williams provides in exchange for the NGL/olefins mixture. 

Once full operating capacity is achieved at the producer's location,  processing the offgas is expected to reduce emissions of carbon dioxide  (CO2) a greenhouse gas by an average of approximately 200,000 tonnes per year. It is expected to reduce emissions of sulphur dioxide (SO2) a contributor to acid rain by an average of approximately 2,000 tonnes per year. 

When combined with Williams' existing offgas processing at another  third-party oil sands producer, the company's operations in Canada will eventually reduce annual CO2 emissions by more than 500,000  tonnes and annual SO2 emissions by 4,500 tonnes.