High Pressure Direct Contact Oxy-Fired Steam Generation System (DCSG)

The Business Opportunity

Natural Resources Canada (NRCan) is seeking expressions of interest from Canadian firms to enter into a commercial licensing arrangement to bring turnkey technology systems to market based on our patented High Pressure Direct Contact Oxy-Fired Steam Generation System (DCSG). This includes all aspects of design, manufacture, construction, commissioning, service, maintenance, support, marketing and sales. While the primary application is in the oil sands industry, other opportunities exist in pulp and paper and power generation.

Brief Technology Description

The DCSG technology is intended to replace the Once Through Steam Generators (OTSGs) or drum boilers that are currently used for Steam Assisted Gravity Drainage (SAGD) systems. The process consists of pressurized, oxy-fuel combustion, with co-injection of minimally treated recycled water from SAGD production wells directly into the combustion chamber. The result is a pressurised, injection ready vapour product; consisting of steam and carbon dioxide, with trace amounts of mineral matter and non-condensable gases. Since DCSG converts all inputs into a useable output, its thermal efficiency theoretically could reach 95-98%. DCSG is also a very competitive carbon capture and storage technology for the oil sands. The DCSG technology eliminates expensive water treatment plants with the aim to reduce overall capital and operational costs.

Reference Material

Patents: Canadian patent: 2744825, US patent: 9,512,999

Appendix A: Technology Background and Details

Appendix B: Business Plan Required Format

DCSG animated video

Text Version


"Extraction of heavy oil called bitumen is an important component of Canada’s economy."

"Alberta provides over 15% of Canada’s GDP and almost a third of that is from resource extraction."

"Unfortunately Canadian oil resources are more difficult and expensive to extract, with higher environmental consequences than many other world crude oil resources, making it less desirable to world markets."

"What if there was a method of extracting bitumen that could be economical and have very little environmental impact including utilizing minimal fresh water, and producing almost no emissions?"

"Working with industry, Natural Resources Canada, through its CANMET Energy labs, has developed methods that create far less negative environmental impact and lower greenhouse emissions, while also being cost competitive."

"CanmetENERGY’s technology builds upon one of the most advanced of these techniques - steam assisted gravity drainage (SAGD)."

"SAGD uses paired horizontally drilled wells that extend to through the bitumen deposit buried underground."

"This process requires some fresh water makeup, and the production of this steam results in making this process energy intensive and increases its negative environmental impact."

"CanmetENERGY has developed steam generation technology that is far less energy intensive and has much less environmental impact. It’s called Direct Contact Steam Generation, or DCSG."

"Where the SAGD process requires expensive treatment of recycle water and normally has no GHG control, DCSG produces steam by putting recycle water from bitumen extraction directly through an oxygen flame with no need for treatment."

"This creates mostly steam, mixed with produced carbon dioxide and residues, all going back to underground injection well. In fact, the system is virtually a closed loop."

"Here’s how it works. We burn natural gas with oxygen at high pressure and inject recycle water from bitumen extraction through the flame to produce steam mixed with CO2."

"The pressurized steam product flows into the steam injection well - the upper of the paired horizontal wells dug underground at a depth of approximately 4-6 meters apart."

"This warms the bitumen in the reservoir causing the bitumen to soften and eventually flow by gravity down to the lower well called the production well."

"The liquid in the lower well, is then pumped back up to the surface…… where the bitumen is separated."

"The recycle water that is left over, without treatment, is then used within the DCSG to make steam again."

"A significant amount the carbon dioxide produced in the process of heating the water stays underground – and that helps helps to reduce greenhouse gases."

"CanmetENERGY has developed the DCSG process over the past 10 years as part of our R&D activities."

"We have built a pilot scale facility at our Ottawa labs that allows us to test every facet of the DCSG process with great care."

"In parallel with the DCSG pilot plant in Ottawa, a larger demonstration unit is being considered by Suncor for use in Northern Alberta."

"Here are the advantages of direct contact steam generation:"

  • It provides greater control of GHG emissions
  • It minimizes fresh water use by consuming recycle water (Produced water and tailings water) without treatment
  • DCSG produces a dry solid waste product
  • It can utilize waste fuels such as petroleum coke
  • Costs are competitive with existing technology
  • And it allows Canada to produce petroleum product with an environmental impact that is on par with the lowest in the world, making our oil much more attractive on the global market.

"For more information about direct contact steam generation and CanmetENERGY, please visit this site."

Expression of Interest

Qualified companies interested in commercializing the NRCan technology must submit a letter of interest to NRCan on or before September 29, 2017. NRCan will invite qualified companies to attend both a webinar, and then a site visit at the CanmetENERGY lab in Bells Corners, Ontario. Participation in these information sessions will be subject to signing a Non-Disclosure Agreement. Following the webinar and site visit, companies may submit questions and requests for clarifications. NRCan’s responses to questions and requests for clarifications will be issued to all qualified companies alike.

Companies interested in becoming NRCan’s licensee will then be required to submit a business plan for NRCan’s consideration. Business plans must address all of the elements outlined in Appendix B: Business Plan Required Format, and must be submitted to the contact below.

Please note that the deadline for this opportunity has passed and NRCan is no longer accepting letters of interest.


Anne Woods, Licensing Officer
Intellectual Property Division
580 Booth Street, Ottawa, ON K1A 0E4
Email: nrcan.ipd-dpi.rncan@canada.ca
Tel: 343-292-8841

Appendix A: Technology Background and Details


Development of Canada’s oil sands is expected to continue into the future in response to recent resurgence in crude oil prices and approval of major projects such as the Keystone XL pipeline, which will increase the market potential in the U.S. In 2011, thermal in-situ extraction methods such as SAGD already accounted for 49% of the bitumen production in Alberta.

The SAGD method uses paired horizontally drilled wells that extend through a bitumen reservoir. Pressurized steam travels through the upper well to heat and liquefy the bitumen, thus reducing its viscosity and enabling it to flow downward by gravity. The heated bitumen is then extracted from the lower well. While being less invasive than mining and having less local environmental impacts, this in-situ operation requires vast quantities of high pressure steam to liberate bitumen.

Currently, steam for SAGD is mostly supplied by OTSG systems. These boilers generate wet steam through indirect heating of recycled water. In preparation for heating, the recycled water requires intensive treatment to remove mineral matter and hydrocarbon residues that may foul the boiler tubes. The dissolved solids largely remain in the feed water as they “flow through” the OTSGs in liquid phase so as to minimize fouling of the boiler tubes. The thermal efficiency of these devices is approximately 85%. The 15% loss consists of sensible heat associated with the dry flue gases and latent heat associated with the uncondensed moisture exiting through the stack. The production of steam in this manner results in more greenhouse gas (GHG) emissions per barrel and requires large amounts of water that must be treated and recycled. The make-up water requirement is around a 10% to 20% and includes some fresh water.

Disadvantages of OTSG boilers and their associated processes include:

  • Requirement for large quantities of treated water to meet boiler specifications;
  • Production of large amounts of greenhouse gases (GHGs) and criteria air contaminants (CHCs);
  • they are inefficient, and
  • production of wet tailings (blowdown water).

Detailed description of the DCSG technology

CanmetENERGY has explored the use of oxy-fired combustion since the mid-1990s for the purpose of creating relatively concentrated carbon dioxide streams from power generation systems that are suitable for either sequestration or use in applications such as enhanced oil recovery.

The DCSG technology is intended to replace OTSGs or drum boilers that are currently used for SAGD. DCSG is derived from experience with coal gasification systems and is therefore oriented towards managing high solids, as encountered with solid fuels or water containing high solids.

The DCSG process consists of pressurized, oxy-fuel combustion, with co-injection of minimally treated recycled water from SAGD production wells directly into the combustion chamber. The result is a pressurised, injection ready vapour product; consisting of steam (85-95 vol%) and carbon dioxide (5-15 vol%), with trace amounts of mineral matter and non-condensable gases. Since DCSG converts all inputs into a useable output, its thermal efficiency theoretically could reach 95-98%. A study performed by Gates et. al. found that approximately 80% of the carbon dioxide could be sequestered, making DCSG a very competitive carbon capture and storage technology for the oil sands. In addition, DCSG will eliminate expensive water treatment plants and aims to reduce overall capital and operational costs.

DCSG advantages over OTSG include:

  • Higher Thermal Efficiency (no stack losses);
  • High quality steam production;
  • Smaller facility foot-print;
  • Lower capital and operating costs;
  • Ability to sequester carbon dioxide directly in the pore space generated by oil extraction or to capture during bitumen water separation for storage in off-site locations;
  • Treat acid pollutants;
  • Ability to use low grade fuels such as asphaltenes and petroleum coke;/p>
  • Ability to use untreated waste or process water (water containing hydrocarbons and high concentrations of dissolved/suspended solids);
  • Minimize or eliminate process and make-up water treatment requirements normally used in the OTSG boiler;
  • Consume existing wastewater pools; and
  • Improve the profitability of in-situ heavy oil extraction.

DCSG steam has about 10% carbon dioxide content and this appears to help, not hinder, reservoir production. The field test sheds some light upon this important aspect which is considered the highest risk associated with the DCSG technology. Initial results reported at the 2017 Oil Sands Summit were very positive with approximately 90% carbon dioxide retention in the reservoir and no effect on reservoir production.

Appendix B: Business Plan Requried Format

Companies are encouraged to submit concise and clear evidence under the following headings:

Executive Summary

Section 1: Company Information

  • General overview and company summary.

Section 2: Key Personnel and Networks

  • Provide company organization chart identifying key members and foreseen roles;
  • Provide resumes of personnel key to this project including credentials and relevant experience;
  • Company resourcing and management capabilities;
  • Proposed construction team structure (licensee, partners, trades, etc.);
  • Proposed commissioning team structure (licensee, partners, handover, etc.); and
  • Proposed structure for on-going service and maintenance.

Section 3: Knowledge and Experience

  • Previous experience on projects similar in scale, scope and cost, indicating performance against initial scope, schedule and cost;
  • Experience with combustion equipment design, oxygen service, and high pressure design;
  • Experience scaling up pilot and experimental equipment for full scale and commercial use;
  • Experience conducting business in Alberta, and knowledge of the provincial regulatory structure for steam and pressure vessels, and requirements for the use of Alberta-based businesses;
  • Familiarity with provincial approval processes (pressure, building, gas, etc.);
  • Provide safety performance for similar projects, identifying number of injuries, severity and relevant information showing actions taken to correct deficiencies. Included should also be relevant WSIB standing, Ministry of Labour Orders to Comply and any other regulatory infractions;
  • Provide evidence of Health and Safety Managed System for the organization (registered under ISO 18000 or not);
  • Provide a review of environmental performance for a similar project and show evidence of Environmental Managed System (registered under ISO 14000 or not);
  • Provide evidence of Quality Managed System (registered under the ISO standard or not);
  • The requirement for a strong Project Management Process is imperative to the success of the project and the meeting of the key objectives. Each company is required to provide evidence of their process and how it compares to standards in the industry using the Construction Industry Institute as the standard for project management;
  • The project will have a First Nation and Metis component. Each company is required to identify experience working with these communities utilizing labour. Please identify success and difficulties encountered and how these were managed; and
  • Provide three customer references. Please note that NRCan may seek additional references from potential DGCS end-users.

Section 4: Financial Stability

  • Each company authorises NRCAN to make credit enquiries about it and any of its affiliates and to receive and exchange credit information from credit reporting agencies or other persons with which the company or any of its affiliates has or may expect to have financial dealings. Each company must provide NRCAN with the company’s (and, on request by NRCAN, any of the company’s affiliates) audited financial statements for the last three financial years for which they are available and financial statements for any period after the last audited period.

Section 5: DCSG Technology Supply Plan

  • Sales and Marketing
    • Present a vision for the technology within their organization; and
    • Provide a sales and marketing plan including representatives, geographic representation, sub-contractors, distributors or agents, and proposed royalty structure.
  • Design/Manufacture
    • Companies are required to describe the engineering and manufacturing capabilities within their organization or potential partners’ organization to produce the key components required to construct the facility;
    • Proposed plan to scale-up the technology; and
    • Proposed approach to design for site specifics.
  • Construction/Commissioning
    • Strategy to work within an operating plant environment and adapting to local rules, regulations and process will be critical not only for the success of the project but also from a Health and Safety perspective. The integration of this new facility into existing facilites will be a key requirement. Each company is required to provide evidence of having worked under these conditions discussing details of success and difficulties encountered and how these were managed and overcome.
  • Support/Maintenance/Service
    • Proposed organizational structure and capability to provide ongoing maintenance and support for the facility as the equipment supplier.

Section 6: Risks and Assumptions

  • Identify key underlying assumptions; and
  • Identify risks and mitigation strategies.