Releasing the Value of Heavy Oil and Bitumen: HTL Upgrading of Heavy to Light Oil

Releasing the Value of Heavy Oil and Bitumen: HTL Upgrading of Heavy to Light Oil

ABSTRACT

Ivanhoe Energy Inc.’s proprietary heavy oil to light oil (HTL) upgrading technology is designed to cost effectively process heavy oil in the field and produce a stable, significantly upgraded synthetic oil product along with by-product energy which can be used to generate steam or electricity. Analysis shows that HTL can virtually eliminate cost exposure to natural gas and diluent and capture the majority of the heavy to light price differential for oil producers. HTL accomplishes this at a much smaller scale and at lower per barrel capital costs compared with established competing technologies. The HTL process represents the application of a commercially proven technology to a new feedstock. Ensyn Group, Inc. initially developed the technology in the early 1980s and has applied it commercially for over 15 years in the biomass (wood) industry. Seven commercial Ensyn biomass processing facilities are in operation in the United States and Canada.

A petroleum pilot plant built by Ensyn in 1998 has been used for testing crude oil from around the world. In December, 2004, operations at a 1,000-barrel-per-day commercial demonstration plant were initiated in the Belridge Heavy Oil Field in the San Joaquin Valley in southern California.

Ivanhoe Energy and Ensyn merged in April 2005, and Ivanhoe Energy gained full ownership of the petroleum upgrading technology for the development of heavy oil reserves around the world. Ensyn Group spun off its existing biomass processing business, Ensyn Renewables Inc., to its shareholders prior to the closing of the merger with Ivanhoe Energy.

Since the commissioning of the commercial demonstration facility (CDF), Ivanhoe Energy has tested a number of crude oils and vacuum tower bottom feedstocks. Analysis of CDF performance confirms that the HTL process is capable of delivering high yields of upgraded product. The HTL process significantly reduces or eliminates most contaminants and the product typically meets pipeline specifications without further treatment. CDF run analysis validates data obtained in the pilot scale experiments. Pilot results and feedstock and synthetic product properties are presented.

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