oil_and_gas_investments

Oil and Gas Investments Bulletin – Canada’s Pipeline Problems Have a Unique (Partial) Solution

VHTL_heavy_oil_upgradingNorth America is finding more oil than it can pipe or ship. Investors and the general public alike now know the story about pipeline constraints; it’s in our [US and Canadian] newspapers every day. Right now, the Permian formation in west Texas has it, and Western Canada has it. The Bakken play in North Dakota had it in 2012. (And the Marcellus natgas formation in Pennsylvania has had it for almost 10 years!

According to Keith Schaefer, writing in Oil & Gas Investments Bulletin, there’s a unique solution–or at least a partial solution–to Canada’s problem, and that is: upgrading Canadian heavy oil.

One of the new technologies that Schaefer identifies as a potential solution to the partial upgrading of Canadian heavy oil is FluidOil’s VHTL.

Read the full article on the Oil and Gas Investments Bulletin website.

 

 

Offshore Technology – Steam Oil and FluidOil Sign Technology Deal

Offshore Technology

4 May 2017
Offshore Technology

Steam Oil Production has signed an agreement to explore the potential of integrating FluidOil’s Viscositor Heavy-to-Light (VHTL) oil upgrading technology into an offshore steamflooding project. Currently, Steam Oil is working on plans for the offshore project. The company holds multiple licences of heavy oil reservoirs in the UK Western Platform, 140km east of Aberdeen. These licences are expected to contain approximately 650 million barrels of oil.

FluidOil VHTL Offshore Facility

FluidOil VHTL Offshore Facility

Steam Oil CEO Steve Brown said: “Steamflooding is the most effective recovery mechanism for heavy oil and we expect to see recovery factors of between 50% and 80% when we steamflood these reservoirs. To do that, we will need a lot of steam and the steam produced as a by-product of FluidOil’s upgrading process will significantly reduce our fuel costs.

“In addition, the VHTL process does not demand a stringent water-in-oil content specification so we can simplify our process requirements.”

As the first step towards the development, Steam Oil is set to construct a steamflood demonstration project on part of the pilot field.

FluidOil’s VHTL technology can generate significant volumes of high-pressure steam and its integration with the Western Platform Steamflood project is expected to reduce separation, steam generation and associated fuel requirements.

Under the agreement, both Steam Oil and FluidOil will evaluate the potentiality to determine the plant configuration for optimal process synergy.

 

For more information, contact:
Celicourt Communications
Ian Middleton / Jimmy Lea
Telephone: +44 (0)20 7520 9261
Email: IMiddleton@celicourt.uk

 

Offshore Oil & Gas – Steam Oil investigates VHTL for heavy-oil North Sea fields

Offshre-Oil-&-Gas-Masthead

By Offshore Staff – 3 May 2017
Offshore Oil & Gas Magazine

LONDON – FluidOil has entered into a cooperation agreement with The Steam Oil Production Co., operator of various undeveloped heavy-oil fields in the UK North Sea. The two companies will investigate the application of FluidOil’s Viscositor Heavy-to-Light (VHTL) oil upgrading technology into an offshore steam flooding project.

Steam Oil’s heavy-oil reservoirs are in an area known as the Western Platform, 140 km (87 mi) east of Aberdeen. Collectively they hold in-placed resources of nearly 650 MMbbl. Initially, Steam Oil plans to construct a steam flood demonstration project on part of the Pilot field. The subsequent steam flood development of the remainder of Pilot and the other Western Platform fields, could, the company believes, deliver more than 300 MMbbl. Further exploration success in the area could increase the potential recoverable resource base to more than 500 MMbbl.

The VHTL technology generates large volumes of high-pressure steam. Integration into the process design for the follow-on Western Platform Steam Flood project could reduce separation, steam generation, and associated fuel requirements. The two companies will examine this potential and determine the optimum plant configuration to maximize process synergies and at the same time minimize fuel costs.

Steve Brown, CEO of Steam Oil, said: “Steam flooding is the most effective recovery mechanism for heavy oil and we expect to see recovery factors of between 50% and 80% when we steam flood these reservoirs. To do that we will need a lot of steam and the steam produced as a by-product of FluidOil’s upgrading process will significantly reduce our fuel costs. “In addition, the VHTL process does not demand a stringent water-in-oil content specification so we can simplify our process requirements. Finally, the VHTL process consumes heavy metals and naphthenic acid and other contaminants which refiners do not like and which would otherwise affect the value of our crude.”

VHTL combines FluidOil’s patented ‘Viscositor’ technology with the ‘Heavy-to-Light’ upgrading process which the company acquired when it purchased the intellectual property of Ivanhoe Energy in 2016. The VHTL process is a simplification of the traditional Fluidized Catalytic Cracking process, used widely in petroleum refineries. VHTL can upgrade heavy oil from less than 10° API into a synthetic crude oil with a gravity of between 23° and 29° API, while removing most of the heavy metals, lowering the sulfur content, significantly reducing the total acid number, and lowering the viscosity. Taken together, this simplifies handling of the crude oil, reducing production and logistics costs, and allows heavy-oil producers to obtain a higher price for their product – up to $20/bbl.

 

For more information, contact:
Celicourt Communications
Ian Middleton / Jimmy Lea
Telephone: +44 (0)20 7520 9261
Email: IMiddleton@celicourt.uk

 

Penn Energy – FluidOil and Steam Oil Enter Into Oil Technology Agreement

1439997446571May 2, 2017
By PennEnergy Editorial Staff , PennEnergy
Source: The Steam Oil Production Company

 

The Steam Oil Production Company has entered into a cooperation agreement with FluidOil, the independent international heavy oil technology company, to explore the potential of integrating FluidOil’s Viscositor Heavy-to-Light oil upgrading technology into an offshore steam flooding project.

Steam Oil is working on plans to launch the world’s first major offshore steam flooding project. Steam Oil has under licence or award a number of heavy oil reservoirs in the UK, in an area known as the Western Platform, some 140 km east of Aberdeen. These discoveries have a total of nearly 650 million barrels of oil (“mmbbls”) in place.

As a first step to developing this resource base, and to learn how best to steam flood offshore, Steam Oil plans to construct a steam flood demonstration project on part of the Pilot field. The subsequent steam flood development of the remainder of the Pilot field, and the other Western Platform heavy oil fields, has the potential to produce in excess of 300 mmbbls. Further exploration success could increase the potential recoverable resource base from the Western Platform to over 500 mmbbls.

FluidOil’s VHTL technology generates significant volumes of high pressure steam, and its integration into the process design for the follow-on Western Platform Steam Flood project could reduce separation, steam generation and associated fuel requirements. As part of the cooperation agreement, FluidOil and Steam Oil intend to explore this potential and to determine the plant configuration which maximises process synergies, delivers the highest value of product from the Western Platform reservoirs, and minimises fuel costs.

“We are very taken with the obvious synergies of integrating FluidOil’s upgrading technology into a steam flooding project,” said Steve Brown, CEO of Steam Oil. “Steam flooding is the most effective recovery mechanism for heavy oil and we expect to see recovery factors of between 50% and 80% when we steam flood these reservoirs.”

“We are pleased to be playing a part in what could potentially be the first project of its kind,” said Charles Parker, CEO of FluidOil. “At a time when the industry is looking to maximise value, we believe that our patented technology could help play an important role in enabling offshore heavy oil producers realise greater returns from their output.”

 

For more information, contact:
Celicourt Communications
Ian Middleton / Jimmy Lea
Telephone: +44 (0)20 7520 9261
Email: IMiddleton@celicourt.uk

 

Daily Oil Bulletin: Buyer Of Ivanhoe’s Partial Upgrading Technology Hopes To Build Demonstration Plant

By  Pat Roche – 

A tiny British-based company that acquired Ivanhoe Energy Inc.’s partial upgrading technology hopes to build a commercial demonstration plant if an oilsands partner will pay for it.

Ivanhoe’s partial upgrading technology went through the early development stages, but the Vancouver-based startup couldn’t raise the large investment needed for a commercial oilsands project. After oil prices collapsed, the company was unable to reach a restructuring agreement with its creditors and was declared bankrupt (DOB, June 3, 2015). Almost a year ago FluidOil Limited said it had acquired the intellectual property of Ivanhoe (DOB, April 4, 2016).

FluidOil was started in Venezuela by a Norwegian who designed a short-residence-time coker. On pilot tests, the technology converted Canadian and Venezuelan heavy crudes to an oil of more than 20 degrees API gravity, says Charlie Parker, FluidOil’s current president.

How the two differ
Parker says FluidOil’s and Ivanhoe’s technologies are nearly identical “mechanically,” but from a process, or chemical-reaction, standpoint, they differ significantly in some ways. FluidOil’s process goes a step further by removing olefins to produce a crude that refiners prefer, says Parker. “[Ivanhoe’s] technology, in our minds, was just a fast-residence-time coker,” he says. “They basically took coke out in a very short residence time and gave you a nice little upgrade and left you with a slightly olefinic product.”

Unlike the Ivanhoe process, FluidOil’s technology, like most upgrading processes, uses hydrogen to remove the olefins. “Our technology provides hydrogen into that reaction, and also provides a far more violent reaction,” Parker explains. But wouldn’t hydrogen make the process more expensive? And isn’t cutting costs the goal of partial upgrading—transporting bitumen more cheaply by eliminating diluent and diluent-related infrastructure?

Parker insists partial upgrading can still be economic even if it uses hydrogen—because FluidOil is simply using hydrogen to remove olefins, not to fully upgrade the bitumen to a light crude, and also because FluidOil doesn’t need methane to make hydrogen. Most upgrading and refining operations extract hydrogen from methane through a process called steam methane reforming. FluidOil’s process doesn’t use methane. “We get our hydrogen from steam. And that’s the absolutely critical part,” says Parker.

He claims: “And that’s why we’re so excited about this. Because we can take the Ivanhoe technology … and just subtly change it so we can get a far, far better product out of it.” So if FluidOil’s process could already do the trick, why buy the Ivanhoe technology? Parker says what FluidOil was mainly buying was millions of dollars worth of engineering work Ivanhoe had already completed. “We’re a very small business. We’ve spent about $12 million developing the technology over 12 years,” he says. “So that’s not a lot of capital.”

FluidOil believes Ivanhoe spent much more. For example, the Canadian firm had already completed a front-end engineering and design (FEED) package for a 20,000-bbl-a-day plant. Parker says his company can use “90 per cent of” this. The British startup also got Ivanhoe’s pilot plant in San Antonio, Texas which Parker says is being re-commissioned. “We’re probably spending about $60,000 to change it to our technology.”

Ivanhoe’s upgrading process was called Heavy-to-Light, or HTL. FluidOil’s was called Viscositor. The hybrid of both, which is to be tested at the Texas plant in the coming months, is called VHTL.

Demonstration plant
After the hybrid FluidOil/Ivanhoe process has been tested at the San Antonio facility, the next step will be to build a small commercial demonstration plant in the Alberta oilsands region. FluidOil says it is working with a large oilsands producer which it hopes will pay for construction and operation of the commercial demonstration plant. Parker says he can’t identify the oilsands operator, citing a confidentiality agreement.

“We’re in the middle of the engineering for that right now,” he told the Bulletin in a recent interview, referring to preliminary work being done ahead of the oilsands partner’s decision on whether to proceed with the demonstration plant. Parker is optimistic because it would be a relatively small project. “We aren’t trying to build a massive plant,” he said. “This isn’t a commercial plant. This is going to be 1,000 bbls a day probably, and it might be 2,000.”

Ed Johnson, a former British investment banker who started his career as a production engineer in heavy oil, said he has known Parker since their university days more than two decades ago. Johnson said he has been familiar with FluidOil’s technology since 2012. Dealing with a heavy oil producer in Albania, Johnson said he would sometimes pitch FluidOil’s technology as a possible way to cut diluent or transportation costs, but he always had to wrestle with the misconception that the ultimate goal is to produce a crude that would fetch a higher price at the refinery. “That’s not your game,” Johnson said in a phone interview. “You’re not trying to upgrade the oil to sell the oil for more money. You’re trying to upgrade to knock out a bunch of costs.” He added: “The problem with heavy oil is not what you can sell it for. It is how you get it to where you can sell it.”

When oil prices were at $100 a bbl, the cost associated with diluent—by some estimates more than $10 a bbl—was less of an issue. With prices at half that level, more attention is being focused on potential solutions like partial upgrading. But technology vendors have been promoting partial upgrading processes since last century. At least a dozen proprietary processes are currently available. To date, no large-scale commercial project has been built. So what about FluidOil’s process?

“I have seen it work and I know it does work,” said Johnson, who acknowledged the real test will be economic, not technical. “It’s not actually a question of: Can you make the technology work? It’s: Can you make the technology work at a price that works?” He added: “Partial upgrading is definitely a solution that makes sense—as long as you understand you’re not trying to improve the value of the oil, you’re just trying to make it easy to move it around.”

 

For more information, contact:
Celicourt Communications
Ian Middleton / Jimmy Lea
Telephone: +44 (0)20 7520 9261
Email: IMiddleton@celicourt.uk