Athabasca Bitumen Test Results Confirm HTL(TM) Upgrading Parameters for Integrated Canadian Oilsands Project
BAKERSFIELD, CA, Sept. 5 /PRNewswire-FirstCall/ — Ivanhoe Energy Inc. President and CEO Joe Gasca and Chief Technology Officer Dr. Robert Graham today announced that the company has completed the initial analysis of the results of the recent Athabasca bitumen test run at its heavy oil upgrading Commercial Demonstration Facility (CDF) in California. This has two separate, but related, points of relevance for Ivanhoe Energy:
a) This analysis, together with additional accumulated CDF and pilot test data, confirms the competitive advantage of HTL upgrading, integrated with heavy oil production in the Athabasca region of Western Canada, and supports Ivanhoe Energy’s plan, currently being pursued, to acquire an oilsands asset and establish an integrated HTL Athabasca oilsands project. b) The Athabasca bitumen run is the capstone of the CDF testing program. This program has generated the necessary data for the design and construction of full-scale, commercial HTL plants.
These results have led Ivanhoe Energy to accelerate its plans for an integrated HTL project in the Athabasca oilsands. Target assets have been identified and due diligence and discussions with the resource owners are ongoing. Technical and financial advisors have been appointed and a heavy oil team is being assembled, supported by Ivanhoe Energy’s heavy oil and thermal expertise from California.
Confirmation of HTL(TM) Upgrading Parameters for Integrated Canadian Project
Ivanhoe Energy has described the competitive advantages of integrated HTL oilsands projects in numerous presentations and public releases, many of which are available on the company’s website. HTL offers four key benefits when integrated with a thermal Athabasca oilsands project:
– HTL can be economically scaled to match the size of commercial steam assisted gravity drainage (SAGD) developments. – By-products of the upgrading process are converted to on-site energy to displace natural gas requirements for steam production. – HTL upgrading allows the producer to capture the majority of the heavy to light crude price differential. – HTL field upgrading frees the producer from diluent needs for transport.
The results of the recent Athabasca bitumen test, together with accumulated data generated in previous runs, validates these specific benefits and parameters, confirming the technical and economic assumptions underlying Ivanhoe Energy’s Athabasca oilsands operating and economic models.
For integrated HTL Athabasca oilsands projects, Ivanhoe Energy would operate in a “High Quality” configuration, in order to meet pipeline specifications and generate enough by-product energy to allow the producer to displace its need for natural gas.
Ivanhoe Energy’s accumulated tests demonstrate that it can operate HTL within a relatively broad continuum of High Quality operating modes. Operations within this continuum vary in terms of liquid yields, by-product energy yields and product characteristics. This High Quality operating flexibility allows Ivanhoe Energy to match the upgrading mode with field and market requirements.
This continuum of High Quality operating parameters includes the following, on the basis of processing Athabasca bitumen with an API gravity of 8 degrees, and viscosity of 20,000 – 40,000 cSt at 40 degrees C:
a) Viscosity: At least 99% reduction, to less than 50cSt at 40 degrees C – within pipeline specifications. b) Liquid yields: From 77-83%, depending on the quantity of on-site by-product energy required. c) By-product energy: Inversely correlated to liquid yields, can offset typical target steam needs for SAGD in the range of 2.8 to 3.5 barrels of steam per barrel of oil. d) Residue conversion: Ability to produce a “bottomless” synthetic crude (ie. zero percent resid). e) VGO content: Over 50% of the HTL product. f) Metals reduction: Approximately 90%. g) Acidity reduction (TAN): To under 0.5% KOH/g. h) Density improvement: From 8 degrees API gravity to approximately 20 degrees API gravity, meeting pipeline specifications.
Ivanhoe Energy’s “High Quality” upgraded product has been valued in earlier studies at approximately 12-15% discount to WTI, as a result of the high content of naphtha, distillate and gas oil, and absence of vacuum residue in the upgraded product.
CDF Correlation with Pilot is Complete – Next Step: Full Commercial Facilities
The Athabasca bitumen run just completed is the capstone of the CDF testing program, and provides the necessary data for the design and construction of full-scale, commercial HTL plants. The goals of the testing program were a) to confirm the key processing results generated in the 90+ pilot plant runs of heavy oil from the U.S. and Athabasca in a large facility, and b) to provide the necessary data for the design and construction of full-scale, commercial HTL plants. Both of these goals have now been achieved.
The results of the 23-run testing program at the CDF, carried out from 2005 to mid-2007, were very consistent with the 90+ runs carried out at the pilot plant in Canada during the period 1999-2001. These results are presented in the table below.
The tight correlation between the pilot plant tests and the CDF tests provides strong validation to the entire body of pilot plant tests, and provides strong technical support for the predictability of upgrading performance in the planned full-scale commercial facilities.
Ivanhoe Energy has confirmed with AMEC, its Tier 1 contractor, that the testing program has generated sufficient data to allow for the design and construction of full-scale commercial facilities. AMEC has completed certain preliminary design work, and will be accelerating this work once a resource deal has been completed.
————————————————————————- Test Processing Characteristic Pilot CDF Crude Goal (1999- (2005- 2001) 2007) ————————————————————————- degrees API 8.2 8.5 ———————————— Feedstock Viscosity (cSt@ 40(degrees)C) 40,000 20,000 Athabasca High ———————————————— Bitumen, Quality Liquid Yield Canada vol% (C5+) 81 83 ———————————— Upgraded degrees API 20 18+ Oil ———————————— Viscosity (cSt@ 40(degrees)C) 60 30 ———————————— Viscosity Reduction % 99 99 ————————————————————————- ————————————————————————- degrees API 13.4 12.9 ———————————— Feedstock Viscosity (cSt@ 50(degrees)C) 404 657 Belridge High ———————————————— Heavy Oil, Yield Liquid Yield California vol% (C4+) 92 95 ———————————— Upgraded degrees API 16.1 16.9 Oil ———————————— Viscosity (cSt@ 50(degrees)C) 75.4 59.3 ———————————— Viscosity Reduction % 81 91 ————————————————————————- ————————————————————————- degrees API 11.0 10.5 ———————————— Feedstock Viscosity (cSt@ 50(degrees)C) 1,927 4,223 Midway High ———————————————— Sunset Yield Liquid Yield Heavy Oil, vol% (C4+) 88 90 California ———————————— Upgraded degrees API 15.2 15.7 Oil ———————————— Viscosity (cSt@ 50(degrees)C) 97 125 ———————————— Viscosity Reduction % 95 97 ————————————————————————- ————————————————————————-
Ivanhoe Energy’s proprietary, patented heavy oil upgrading technology (HTL(TM)) produces lighter, more valuable crude oil from heavy oil and bitumen at lower costs and in smaller-sized plants than conventional technologies. The process also produces by-product energy that can be used to generate steam or electricity.
Ivanhoe Energy is an independent international heavy oil development and production company focused on pursuing long-term growth in its reserves and production using advanced technologies, including its proprietary heavy oil upgrading process (HTL(TM)). Core operations are in the United States and China, with business development opportunities worldwide. Ivanhoe Energy trades on the NASDAQ Capital Market with the ticker symbol IVAN and on the Toronto Stock Exchange with the symbol IE.
FORWARD-LOOKING STATEMENTS: This document includes forward-looking statements, including forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements concerning the potential benefits of Ivanhoe Energy’s heavy oil upgrading technology, the potential for commercialization and future application of the heavy oil upgrading technology, and other statements which are not historical facts. When used in this document, the words such as “could,”"plan,”"estimate,”"expect,”"intend,”"may,”"potential,”"should,” and similar expressions relating to matters that are not historical facts are forward-looking statements. Although Ivanhoe Energy believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements include the potential that the HTL process to upgrade heavy oil and bitumen may not be commercially viable, market acceptance of the HTL technology may not be as anticipated, Ivanhoe Energy’s lack of history in developing commercial HTL opportunities, competition and other risks disclosed in Ivanhoe Energy’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on EDGAR and the Canadian Securities Commissions on SEDAR.
CONTACT: Cindy Burnett, (604) 331-9830, Website: http://www.ivanhoeenergy.com/
Ivanhoe Energy Inc.
CONTACT: Cindy Burnett, (604) 331-9830, Website: http://www.ivanhoeenergy.com/