Ivanhoe-ENSYN RTP
Wednesday, April 26, 2006
Two Canadian chemical engineers working in the forestry sector have invented what may become the oil industry's "holy grail." At least that is what the TSX's Ivanhoe Energy Inc. is betting on, as are the world's three biggest oil corporations.
The inventors are Dr. Robert Graham and Barry Freel, two Ottawa-based chemical engineers, who founded Ensyn Group Inc. of Ottawa.
They have devised a process that converts wood into fuels and chemical feedstocks, which is being applied to upgrading heavy oil into valuable light crude at a reduced cost of US$12 to US$20 per barrel.
That's why Ivanhoe has gotten the attention of the world's biggest oil companies.
Besides ExxonMobil and Shell, Conoco-Phillips has licensed the exclusive rights to the process throughout Canada until 2010.
British-Petroleum and several national oil companies around the world are studying the process and it's been licensed for use in Iraq.
What's important to oil producers is that the Ivanhoe-Ensyn process can upgrade oil onsite, or in the field. "We have mini upgraders at or near the wellhead," he said. "These are turnkey and transferable to other locations."
This portability and localization eliminates the huge cost of gigantic facilities and the accompanying transportation costs required to bring raw materials and fuels to the centralized site.
Another huge potential advantage derived from this process (trademarked "RTP" for "Rapid Thermal Processing") is that production continues 24/7.
By contrast, traditional upgrading is in batches, requiring equipment to be shut down, carbon waste removed from the upgraders, and then huge amounts of energy deployed to restart then use the process.
The California project is the first commercialized application of the Ivanhoe-Ensyn technology. The first pilot plant, producing only 1,000 barrels a day, was built in Ottawa in 1998 by Gulf Canada Resources and Ensyn Group.
While definitive results from the commercial plant may be two years away, the technology is exciting some big players. If it proves to be effective, the process will liberate billions of barrels of oil for production around the world in oilsands and remote or depleted fields.
"This will allow companies to book stranded assets that are too expensive to upgrade," said Mr. Barnett.
Even more fascinating is Ivanhoe's business plan. It will only license the process to oil producers in return for a piece of the action. In other words, it's the first "tech farm-in."
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