BEIJING, China, Jan. 19, 2016 /CNW/ - Hebei Zhongjie and Genoil
Inc. of Canada have signed a
contract and plan to establish a new company called Dora Energy
Technology Company this month for the construction of one of the
world's most advanced heavy oil refineries. This project will
utilize the Genoil GHU Technology. Hebei Zhongjie Petrochemical has
already invested 25,000,000 RMB's to date and we are very excited
about this project. The parties have completed a new
feasibility study and technological selection required for the new
refinery project. A well-known private Chinese engineering firm has
been selected for the engineering and they calculate the project
will generate a 32% rate of return on equity and will have a payoff
of 7 years. The feasibility study encompasses all economic
calculations including the capital costs, the operating costs and
necessary factors as part of the package required by our Chinese
lending source.
We have lined up the required feedstock and will organize sales
necessary contracts for finished products sufficient to amortize
the loan from the bank. The balance sheets of the feedstock
provider and the buyer of the finished products are sufficient to
stand behind their commitments. The complete financing
package that the joint venture has prepared will be modeled after
the way Shell financed their forty billion
dollar Sakhalin LNG project in Russia which lined up the financing based on
signed long-term contracts for their input & output. The
parties are exploring larger projects in China and around the world with this in mind.
Genoil and Hebei Zhongijie Petrochemical Group are looking to
expand their cooperation and increase the size of this project.
Construction on this project will begin shortly.
"China's economy has grown
steadily at a pace unprecedented in modern history. Energy
must keep up with China's fast
pace growth and satisfy its growing appetite for oil. Genoil's
superior technology and strong international relationships are
important to ensuring energy security for China. We are proud to be working with
Genoil to build one of the most advanced residue upgrading
refineries which will lower the cost of energy for consumers in
China." Says Mr. Yu – president of
Hebei Zhongie Petrochemical. We are very familiar with this
technology and in our opinion Genoil is capable of supplying
millions of barrels a day of crude oil to the Chinese market
through their international relationships.
Chinese refiners are looking to get more transportation
products, namely gasoline & diesel, out of each barrel of crude
oil and residue. They are looking for technologies, which can take
advantage of lower cost heavier feed stocks in order to improve
their margins.
Zhongjie and Genoil have a long history of cooperation
together. We have tested our feedstock at Genoil's
Two Hills upgrading facility, and
we are very impressed with the Genoil technology and the results
from our test. We are also impressed with Genoil's management,
their access to capital, and feel confident in their ability to
deliver and execute this project.
About the Genoil Technology:
The Genoil technology was tested with financing and support from
Conoco Canada, a subsidiary of ConocoPhillips [NYSE: COP].
The Genoil GHU was moved from Genoil's Two Hills site to Kerrobert, Saskatchewan, and placed at the
Conoco site. The GHU was operated under Conoco's supervision and it
upgraded Conoco's bitumen with an API range from 6.9 to 8.5 under
catalytic conditions at various operating parameters to Conoco's
satisfaction. The upgraded bitumen feed was converted to 24.8 API.
This is a 96% pitch conversion rate. Hebei Zhonjie Petrochemical
has reviewed the Conoco data and lab reports. Hebei Zhongie
Petrochemical Group see's the Genoil reactor process as
significantly more efficient and superior than those in use today.
The OPEX costs are only $3.00 per
barrel according to a feasibility study done by the China National
Petroleum Company (CNPC) division China Petroleum Engineering Co,
Ltd Dalian (CPECC-DL). There are no competitors who can match
Genoil's costs per barrel.
Conoco collected samples on the feed, product and gas streams
and had them analyzed. The following are the main results
extracted from Conoco's lab report. Samples obtained as mutually
agreed by ConocoPhillips and Genoil:
|
Feed
(bitumen)
|
Product (Genoil
upgraded)
|
|
|
|
API
|
8.5
|
24.8
|
Sulfur (wt
%)
|
5.14
|
0.236
|
Total Nitrogen (wt
%)
|
0.286
|
0.1432
|
Acid
Number
|
3.05
|
0.11
|
Carbon
Content
|
83.25
|
86.68
|
Hydrogen
Content
|
10.59
|
11.88
|
Oxygen
Content
|
0.78
|
1.07
|
Pentane Insoluble
Asphaltene
|
17.3
|
1.6
|
Heptane Insoluble
Asphaltene
|
12.6
|
1.2
|
|
|
|
|
|
|
Distillation
|
% yield
(volume)
|
% yield
(volume)
|
|
|
|
IBP-171 C
|
0
|
8.67
|
IBP-232 C
|
1.96
|
11.49
|
232-343 C
|
12.44
|
33.02
|
343-524 C
|
32.27
|
36.71
|
524 C plus
|
53.25
|
10.08
|
Loss
|
0.08
|
0.03
|
Of major interest to Hebei Zhongie Petrochemical is the
conversion of the 524 plus fraction by over 80% at the mild
conditions of 745 F and 1600 psig. In addition the reduction
in the acid number from 3.05 to 0.11, is a 96% conversion
rate. The sulfur and nitrogen reductions were expected due to
previous testing on heavy crudes, but nevertheless again were
significant.
Genoil's heavy oil and residue Upgrader is designed to convert
heavy crude / bitumen / atmospheric residues / vacuum residues into
a lighter crude so that it can be transportable by pipeline without
the aid of diluent, and to make it more compatible for processing
in existing refineries. By increasing the yield of light
products and decreasing the residual portion of a heavy crude
stream, heavy crude or bitumen becomes more compatible with
conventional oil as typically treated existing refineries.
SOURCE Hebei Zhongjie Petrochemical Group Co. Ltd.