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.
Image with caption: "Hebei Zhongjie Petrochemical (CNW Group/Hebei Zhongjie Petrochemical Group Co. Ltd.)". Image available at: http://photos.newswire.ca/images/download/20160119_C7155_PHOTO_EN_600871.jpg
Hebei Zhongjie Petrochemical, Mr. Yongjun Zheng, Phone: 86 31 7580 1985, Lingang Economic Tech. Development Area, Huanghua Cangzhou, 061101, China
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