Ivanhoe Energy performs successful run on heaviest fraction of California heavy oil
Conference call later today to discuss the run
BAKERSFIELD, CA, March 6 /PRNewswire-FirstCall/ - Ivanhoe Energy Inc.'s (NASDAQ: IVAN and TSX: IE, IE.U) heavy oil upgrading commercial demonstration facility (CDF) in California has completed a product run in which the CDF successfully upgraded vacuum tower bottoms (VTBs) derived from California heavy oil. VTBs have an API gravity that is typically less than 7 degrees, and are the heaviest and most viscous components of crude oil.
"This product run successfully demonstrated Ivanhoe Energy's heavy oil upgrading technology in one of two primary modes which would be used in a commercial operation - the "High Yield" configuration," said Leon Daniel, Ivanhoe Energy's President and CEO. "Our High Yield operation is suited for a broad range of "stranded" heavy oil resources that cannot be developed due to the inability to transport the heavy crude from the field to market, and is focused on viscosity reduction and maximization of liquid product yields. Stranded field opportunities are found throughout the world's oil basins and Ivanhoe Energy has identified various specific target opportunities of this type."
In this latest test, California heavy oil VTBs, with a very high viscosity (approximately 300,000 centipoise at 140 degrees F), were converted to a low viscosity product (1300 centipoise at the same temperature) - a reduction in viscosity of over 99%. VTBs are the heaviest fraction of crude oil and, at room temperature, are virtually solid - similar to dry road asphalt. Once processed with Ivanhoe Energy's HTL equipment, the upgraded VTBs are blended with the lighter crude oil fractions removed by earlier processing and would yield a product with a viscosity low enough to flow freely in a pipeline without the need for adding diluent or pipeline heating. The overall product blended yield from this run would be over 90%.
Ivanhoe Energy's patented HTL technology upgrades the heaviest fraction of the heavy crude oil in the hot conversion section of the plant, after separation of these components from the lighter fractions. Both the upgraded VTBs and the separated light fractions are then blended before shipping. The yield and viscosity data from this most recent run is comparable with data generated from comparable runs in the pilot plant, and is consistent with the working assumptions in Ivanhoe Energy's economic modeling for its HTL projects.
The heaviest oils found around the world - like Canada's Athabasca bitumen, contain approximately 45%-55% VTBs with the balance consisting of lighter fractions of oil. California raw heavy crude contains approximately 33% VTBs.
The most recent run follows the California whole heavy crude run carried out and announced in January. January's successful run provided Ivanhoe Energy with the necessary information to proceed with this VTB run. The most recent run was a significant step forward in that the feedstock processed was dramatically heavier and more viscous (i.e. a solid rather than a liquid at room temperature) than the whole heavy crude oil run in January, and it was a test utilizing a process configuration intended for specific commercial applications - those aimed primarily at viscosity reduction and maximizing liquid volume yields.
The next steps in the CDF commercial product runs will be aimed at two goals:
- further processing of VTBs, but in a "High Quality" configuration -
this is similar to the High Yield mode, but with the addition of
recycle operations. This configuration will be used in cases
requiring both high product quality and maximum by-product energy
(such as is suited for application in Canada's Athabasca region,
California, Oman, and certain applications in South America), and
- the execution of extended runs.
In order to achieve these goals, the CDF requires additional equipment and upgrades, principally in the peripheral equipment, which is expected to take 4-6 weeks.
The data from this most recent run, together with the data from runs to be conducted over the coming months, will allow us to initiate the site- specific design and engineering for full commercial 10,000-15,000 barrel per day plants. This site-specific work would start when the CDF data is available, and as Ivanhoe Energy draws to conclusion ongoing discussions with resource owners around the world related to commercial deployment of the HTL technology.
Ivanhoe Energy's heavy oil upgrading technology produces lighter, more valuable crude oil at lower costs and in smaller-sized plants than conventional technologies. The technology addresses the three key challenges to heavy oil development, and does so at a scale as low as 10,000-15,000 barrels per day:
- the value of the upgraded heavy oil is substantially increased;
- the viscosity of the upgraded product is dramatically reduced,
allowing it to be transported by pipeline; and
- significant amounts of by-product energy are produced, as an on-site
source for the production of the steam and/or power.
Ivanhoe Energy is an independent international oil and gas exploration and development company focused on pursuing long-term growth in its reserve base and production using key technologies, including its proprietary heavy oil upgrading process, state-of-the-art drilling and enhanced oil recovery (EOR) techniques and the conversion of natural gas to liquids (GTL). 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 (TSX) with the symbol IE. On the TSX, Ivanhoe Energy is listed and traded in both Canadian and U.S. dollars. The U.S. dollar trading symbol on the TSX is IE.U.
Conference Call:
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Ivanhoe Energy will host a conference call today, Monday, March 6, for
investors and analysts at 4:30 p.m. EST (1:30 p.m. PST) to explain the
technical aspects of this run. The conference call may be accessed by dialing
1-866-540-8136 in Canada and the United States, or 1-416-340-8010 in the
Toronto area and internationally. A simultaneous webcast of the conference
call will be provided through www.ivanhoeenergy.com and
www.newswire.ca/webcast. If you are unable to participate in the call it will
be archived for later playback by dialing 1-800-408-3053 or 1-416-695-5800 and
entering the pass code 3178796 followed by the number sign, or via
www.ivanhoeenergy.com. The archived playback will be available until
April 5th, 2006.
Information contacts:
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All locations: Cindy Burnett 1-604-331-9830 (North America)
In Asia: Patrick Chua 86-1370-121-2607 / 852-9193-4056
Website: www.ivanhoe-energy.com
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