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
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.
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.
For further information:
Manager, Corporate Communications
(403) 817 1108