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7/24/2019 trasportation heavy oil
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ReducingReducing Diluent Diluent Required in theRequired in theTransportation of Heavy Oils and Transportation of Heavy Oils and
BitumenBitumen
COQA - Salt Lake City, Utah
9 June 2011
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Company highlights
JetShear ™
TechnologyThe company has developed a proprietary technology that has asignificant cost advantage over alternatives in thetransportation of extra heavy oil
Technology has been successfully piloted in Canada
Reached commercial terms on 1,000 bpd facility in June 2010with Canadian producer
Began operating 1,000 bpd facility in first quarter 2011 on heavyoil site in eastern Alberta (Canada)
Executed Letter of Intent on 5,000 bpd facility in May 2011 with amajor oil sands producer
Multiple tests for clients in lab and at pilot confirm technologybenefits; stability of product confirmed
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Company highlights (cont’d)
• Experienced team with proven track record – Joe Gasca, CEO
• 30+ years of industry experience, most recently serving as CEO of Ivanhoe Energy
• 21 years in major leadership positions at Texaco
– Dr. Esteban Chornet, Founder • Inventor of JetShear TM technology
• Professor of Chemical Engineering at Université de Sherbrooke (Québec, Canada),
affiliation with NREL – Michel Chornet, VP Engineering• 12+ years of engineering and technology development experience in the oil & gas and
renewable energy sectors
• Shell and H-Power
– Marcel Matte, VP-Projects/Operations• 23 years of process engineering and project management experience
• Most recently established and led Calgary office for Fransen Engineering
• Committed investors – Rho Ventures and Braemar Energy Ventures
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• Extra heavy oil (EHO) is very costly to transport to market•Viscosity prevents EHO from being put directly in a pipeline
•Producers purchase light oil (diluent) at premium price to blend with EHO
•Highest operating cost for EHO producer (target client)
• JetShear - Significant reduction in viscosity•Up to 50% reduction in diluent requirement•Up to 3% net density improvement
•Improved netback – diluent & tariff savings
• Cost effective•Small scale provides significant cost advantage
•Small “footprint”•Economies of scale with little to no “scale up” risk
• Attractive economics•Project economics indicate 2 year payout on investment
Fractal has proprietary patentedtechnology to improve heavy oil quality
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Heavy oil industry – the market
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oil sands mine
blending terminal
refinery
truckers
integrated upgrader
Pipeline Key
Bitumen/HO
Diluent
Upgraded oil
Heavy Oil industry value chain
blending terminalheavy oil producer
Integrated
producer/upgrader
heavy oil producer
“Upstream” “Midstream” “Downstream”
JetShear
application
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Lloydminster/Provost
Heavy Oil Region
Athabasca
Oil Sands Region
Cold Lake
Oil Sands Region
Peace River
Oil Sands Region
SAGD Projects (currently 13)
Thermal Oil Sands “in-situ”
Conventional Heavy Oil (“cold”)
Mining Projects (currently 4)
E d m o n t o n E d m o n t o n
H ar di s ty H ar di s ty
F or t F or t
Mc Mur r ay Mc Mur r ay
Thermal Oil Sands “in-situ”
Conventional Heavy Oil (“cold”)
The Canadian Heavy Oil market
8-9° API
10° API
12+° API
10° API
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Diluent* required for transportation of Heavy Oil is expensive
SellDilBit
@ blend priceless tariff
ProducedBitumen/Heavy oil
PurchaseDiluent@ C5+ priceplus tariff
* Diluent is a light hydrocarbon (typically a natural gas liquid or condensate in Canada) that is used to “dilute” the heavy oil in order to improve its transportation characteristics (lower viscosity)
• Bitumen & Heavy Oils are dense (<12 °API) and highly viscous(100,000+ cSt) requiring significant diluent to meet transportation
quality specifications; often as much as 30% blend ratio• Netback to the producer is highly volatile
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Achieves viscosity spec
using ~half the diluent
Using JetShear™, a heavy oil producer can meet pipelineviscosity requirement with substantially less diluent
350 cP
Results from Fractal – Sherbrooke labs
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DHO INTEGRATION
Thermal facility application
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JetShear™ – the technology and its
application
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A very simple system!Pilot Facility Diagram
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Small footprint
Fast Deployment
Low Engineering Risk
1,000 bpd JetShear™ FacilitySystem layout
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South View of Skid
North View of Skid
1,000 bpd FacilityBlending Skid
Novel, patented technology
in this box!
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JetShear ™ 1,000 bpd Site
JetShear Pump Building
MCC
Heater
Cooler
Process Tank
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Heavy Oil
Heavy Oil Processed with JetShear
JetShear™ processUsing complex technology
* Solvation
* Temperature - facilitates molecular mobility
* Cavitation - liberates kinetic energy to chemical energy
* Near sonic velocities
* High shear forces
Conventional Blend
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Pilot Results
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300 bpd Pilot Facility
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16.5
17
17.5
18
18.5
19
19.5
20
20.5
21
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Results from Pilot Facility – heavy oil
0
100
200
300
400
500
600
700
800
900
1000
Without Jetshear With JetShear
°API GravityViscosity
Pipeline
Specifications
August 2009 Monthly Average Results
cS
density (inverse)
11.6 °API feedstock, 80 °API 14.5% blending ratio
~2.7 °APIincrease~90%
reduction
We have successf ul l y scal ed up our pr ocess i n t he f i el d! W e h a v e s u c c e s s fu l l y s c a l ed u p o u r p r o c e s s i n t h e f i el d !
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16.5
17
17.5
18
18.5
19
19.5
20
20.5
0
200
400
600
800
1000
1200
Without Jetshear With JetShear
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Results from Pilot Facility - bitumen
°API GravityViscosity
Pipeline
Specifications
May 2010 Monthly Average Results
cS
density (inverse)
7.5 °API feedstock, 70 °API ~25% blending ratio
~2.5 °API
increase~91%
reduction
B i t u m e n B i t u m e n - -Di luent D il u e n t b l en d p r o v i d e d b y a S A G D p r o d u c e r b l e n d p r o v i d e d b y a SA G D p r o d u c e r
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Maxxam Analytics Preliminary Assays Results
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Discussion with COQA
• What are implications of the (relativelyminor) changes in the assay for the dilbitprocessed using JetShear?
• What actions should Fractal undertake toaddress any concerns with the JetSheardilbit?
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Visit our website: www.fractalsys.com
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Appendix
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Protecting and enhancing value
• Two patents have been filed:
– US20080217211 – patent pending
• Process for treating heavy oils
– US20080314796 – issued May 17, 2011
• Treated oils having reduced densities and viscosities
• Filing countries:
– Canada and USA
– National Filings
• Brazil, Ecuador, Colombia, Mexico, EU, Oman, China
– PCT application
• Work underway for new patent(s)
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Dilbit #2