Ivanhoe Energy to Test Heavy Oil Upgrading Facility

Ivanhoe Energy reports that preparations are well under way in advance of key upcoming test runs at its heavy oil upgrading Commercial Demonstration Facility (CDF) in California.

Ivanhoe Energy's CDF is being prepared for a series of test runs that will demonstrate the processing of Athabasca bitumen and vacuum tower bottoms (VTB's) in a "High Quality" configuration. This configuration, appropriate for numerous resource opportunities around the world, including the Athabasca oil sands in Western Canada, produces a more fully upgraded product, as well as maximum amounts of by-product energy.

In order to carry out these runs, a number of upgrades and enhancements to the CDF were required. These upgrades were primarily related to peripheral equipment linked to the handling of raw feed and the processed product, as well as equipment redundancy and back-up for more extended runs.

These upgrades were originally expected to take 4-6 weeks. As a result of the extremely tight markets in the industry for oilfield personnel and equipment and additional minor improvements that extended the original timeline, the company has experienced some delay and now anticipates commencing the next set of runs in late May. Athabasca bitumen has been shipped from Western Canada and is currently at the CDF in onsite storage ready for processing.

The data from upcoming runs will allow Ivanhoe Energy to initiate the site-specific design and engineering for full commercial 10,000 to 15,000 barrel-per-day plants.

Ivanhoe said that its heavy oil upgrading technology produces lighter, more valuable crude oil at lower costs and in smaller-sized plants than conventional technologies. The technology addresses the four key challenges to heavy oil development:

    -  the facilities can be field-located and effective at a scale as low as
       10,000 to 15,000 barrels per day;
    -  the value of the upgraded heavy oil is substantially increased;
    -  the viscosity of the upgraded product is dramatically reduced,
       allowing it to be transported by pipeline without the need for blend
       oils; and
    -  significant amounts of by-product energy are produced, as an on-site
       source for the production of the steam and/or power needed in heavy
       oil recovery.