Momentum Building to Commercialize HTL
CALGARY, Nov. 20, 2013 /CNW/ - Ivanhoe Energy Inc. (TSX:
IE; NASDAQ: IVAN) announced today that heavy crude oil extracted
from Ecopetrol's San Fernando T2 formation in Colombia was successfully upgraded from high
viscosity 8 oAPI crude oil to a low viscosity 15
oAPI synthetic crude oil using Ivanhoe's proprietary partial upgrading
process, Heavy-to-Light (HTL®). Ecopetrol is the
largest company in Colombia and is
one of the four principal petroleum companies in Latin America.
The successful tests at Ivanhoe's Feedstock Test Facility (FTF) in
San Antonio, Texas demonstrate the
flexibility and robustness of the HTL upgrading process to convert
diverse heavy crude feedstocks into high value, marketable and
pipeline-ready synthetic crude oil (SCO). SCO carries a
market value near to Brent Crude, a significant improvement over
the value of the original crude oil.
The SCO produced by the HTL process has a low
viscosity and is pipeline ready which eliminates the need to blend
the crude oil with diluent in the production field.
Ivanhoe has recently conducted
several tests at the FTF that demonstrate the stability of the SCO
product in relation to transportation and refining systems.
Additionally, refinery pilot plant runs conducted at the Southwest
Research Institute demonstrate that HTL SCO produces specification
gasoline, jet and diesel fuels.
"As demonstrated by test runs conducted in our
FTF facility, the HTL process can upgrade heavy oils of different
qualities," said Dr. Michael
Silverman, Ivanhoe Energy's Chief Technology Officer.
"Current market conditions and our advanced state of commercial
readiness creates opportunities to install Ivanhoe's partial upgrading process
globally."
Heavy oil resources will become an increasingly
important component of the global oil supply, with produced volumes
growing by 50% over the next 15 years according to the
International Energy Agency. However, several constraints
currently limit the economic feasibility of developing these
resources.
- Price differentials between heavy and light fractions of crude
oil have been wide and volatile over time. This market
dynamic is likely to continue as a result of increasing demand for
distillate fuels, decreasing need for residual fuel oils and heavy
oil production growing faster than refinery heavy oil conversion
capacity.
- The current practice of diluting heavy crude oil with light
crude oils or gas condensate to render it transportable is costly
and inefficient.
- Heavy crude oil requires substantial energy to extract from the
reservoir as compared to lighter grades of crude oil.
A paradigm shift in the industry is underway
towards process intensification where coke is removed from the
heavy oil close to the production site. This shift reduces heavy
oil field development challenges and provides both economic and
environmental advantages. HTL, Ivanhoe's partial upgrading technology, will
play a significant role in this paradigm shift.
Reputable consultants to the energy and chemical
industries, The Kline Group, completed an evaluation which compares
HTL to more than 10 other upgrading technologies under development
today. In this comparison, The Kline Group concluded that HTL
is the leading partial upgrading technology based on five
significant advantages:
- it is a novel carbon rejection process that is best suited for
application in the field;
- it produces high yields of valuable, transportable SCO;
- it is in an advanced stage of development;
- it requires lower capital costs; and,
- it requires lower operating costs.
Ivanhoe will
deploy HTL on its own heavy oil resources and has been developing
several onshore and offshore projects in which third party heavy
crude oil will be partially upgraded for a service fee. A number of
business development projects are progressing with further news
anticipated in the coming months.
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Ivanhoe Energy is an independent international
heavy oil exploration and development company focused on pursuing
long-term growth in its reserves and production using advanced
technologies, including its proprietary heavy oil upgrading process
(HTL®). Core operations are in Canada, United
States, and Ecuador, with
business development opportunities worldwide. Ivanhoe Energy trades
on the Toronto Stock Exchange with the ticker symbol IE and on the
NASDAQ Capital Market with the ticker symbol IVAN. For more
information about Ivanhoe Energy Inc. please visit
www.ivanhoeenergy.com.
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 the potential for commercialization and future
application of the heavy oil upgrading technology and other
technologies, statements relating to the continued advancement of
Ivanhoe Energy's projects, statements relating to the timing and
amount of proceeds of agreed upon and contemplated disposition
transactions, statements relating to anticipated capital
expenditures, statements relating to the timing and success
of regulatory review applications, 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 Company's projects will experience technological
and mechanical problems, new product development will not proceed
as planned, the HTL® technology to upgrade bitumen and
heavy oil may not be commercially viable, geological conditions in
reservoirs may not result in commercial levels of oil and gas
production, the availability of drilling rigs and other support
services, uncertainties about the estimates of reserves, the risk
associated with doing business in foreign countries, environmental
risks, changes in product prices, our ability to raise capital as
and when required, our ability to complete agreed upon and planned
asset dispositions, competition and other risks disclosed in
Ivanhoe Energy's 2012 Annual Report on Form 10-K filed with the
U.S. Securities and Exchange Commission on EDGAR and the Canadian
Securities Commissions on SEDAR.
SOURCE Ivanhoe Energy Inc.