Calgary (Platts)--19Apr2013/329 pm EDT/1929 GMT

Alberta's government will spend C$206 million ($200.7 million) to fund five oil sands-related pilot projects aimed at increasing bitumen recoveries and reducing fresh water usage for in-situ facilities, the province's Department of Energy said Friday.

Imperial Oil, Cenovus Energy, Canadian Natural Resources and Perpetual Energy are to spend the funding on projects ranging from reducing GHG emissions by using propane and propane-diluent solvent instead of steam to move heavy oil, to using polymer flooding to increase oil recovery.

Alberta's Innovative Energy Technology Program will provide C$33 million of the total funding, while the remaining C$173 million will be made by the industry, the department said in a statement.

Alberta's oil sands hold 1.8 trillion barrels of bitumen, but only about 9% is recoverable using existing technologies, the announcement said, adding the new facilities will have the potential to "dramatically" reduce the amount of fresh water used during production. Another project will use a new method of steam production for more efficient extraction, reducing green house gas (GHG) emissions and the remaining projects will focus on improving crude oil and bitumen reserves that were once unrecoverable.

"These innovative technologies hold significant potential for reducing the environmental impact of energy production and make tapping into additional reserves more viable," Alberta's Energy Minister Ken Hughes said in a statement.

--Ashok Dutta, newsdesk@platts.com --Edited by Carla Bass, carla_bass@platts.com

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