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Total Transport Cost
The Altex Pipeline System provides the lowest total transport cost
(TTC) for
bitumen shippers
from northern Alberta
oil sands to the U.S. Gulf Coast
(USGC).
TTC includes:
- the pipeline toll for each of the bitumen and
diluent portions of the diluted
bitumen;
- the cost of holding the inventory when both the
bitumen> and the diluent portions of the
diluted bitumen are in transit;
- and importantly, the commodity costs associated with the type of
diluent product required to thin the bitumen sufficiently to permit it to flow in a pipeline system.
Conventional pipeline systems rely upon costly
condensate as diluent, resulting in a prohibitively
expensive
diluent commodity value loss and a correspondingly high
TTC. The diluent commodity value
loss on conventional systems can equal or even exceed the pipeline tolls.
The Altex Pipeline System is capable of utilizing alternative
diluents, in addition to condensate, resulting in a dramatic reduction or elimination of the corresponding
>diluent commodity value loss, providing Altex shippers with a significantly reduced TTC.
Pipeline Toll Component
The pipeline tolls on the Altex Pipeline System will reflect the owning and operating costs of a
new pipeline system. Those costs essentially mirror the costs of alternative systems, as the design
would use:
- conventional pipeline equipment,
- conventional pipeline construction techniques, and
- a direct route to the target market.
The Altex technologies, including using alternative
diluents, permit the transport of significantly
more bitumen than if conventional condensate
diluent were utilized.
- The Altex Thermo-LEVR™ and
BIRDA™ technologies permit a blend ratio of 83%
bitumen to 17% diluent, requiring only 1.2 barrels of diluted
bitumen to transport a barrel of net bitumen.
- A conventional pipeline system using
condensate as a diluent requires a blend ratio of 70%
bitumen with 30% diluent, requiring 1.43 barrels of diluted
bitumen to transport a barrel of net bitumen.
- A conventional pipeline system using synthetic crude oil
(SCO) as a
diluent requires a blend
ratio of 55% bitumen with 45%
diluent, requiring 1.82 barrels of diluted
bitumen to transport a
barrel of net bitumen.
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Diluent Commodity Cost Component
The Altex Pipeline System concept hinges on reducing the
diluent commodity cost component of the
total transport cost to its shippers.
Conventional bitumen pipeline options are designed primarily to use
condensate as diluent. Condensate diluent must be acquired in Alberta at a cost that is higher than it could be locally purchased in
the USGC region. Transport of the diluted bitumen to the
USGC consequently results in a value loss
on the condensate diluent, which can equal or even exceed the pipeline toll incurred by the
bitumen.
The Altex Pipeline System is capable of utilizing alternative
diluents which result in a dramatic
reduction or elimination of the corresponding diluent commodity value loss. In addition, Altex's
Thermo-LEVR™ and BIRDA™ technologies permit the use of
condensate diluent, at a reduced dilution
blend ratio, with superior transportation economics over conventional systems.
Inventory Carrying Cost Component
The Altex Pipeline System will employ a direct route without break-out storage, minimizing the
in-transit time of transported materials. Consequently, the cost of inventory on the Altex
Pipeline System will initially be one-half of alternative systems, and is reduced to about
one-quarter as
throughput is increased (via subsequent expansions).
Summary
In total, the Altex Pipeline System is capable of delivering
bitumen from northern Alberta to heavy oil refineries in the
USGC for between one-third to one-half the total transport cost
of alternative options on conventional systems, depending on the
diluent utilized and bitumen quality.
The Altex diluent can be removed at the system's
USGC pipeline terminus allowing the transported
bitumen to be diluted with conventional condensate
diluents, purchased locally at local USGC prices,
for ultimate delivery to USGC refineries.
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