UPGRADER FOR HEAVY, EXTRA-HEAVY CRUDE/BITUMEN AND RESIDUAL FRACTIONS

Transcription

1 UPGRADER FOR HEAVY, EXTRA-HEAVY CRUDE/BITUMEN AND RESIDUAL FRACTIONS

2 TABLE OF CONTENTS Section A Refiners General Introduction face tremendous and Market Overview pressures to maintain profits, whil e Section B Introduction Genoil GHU & Hydroconversion Section C Genoil GHU Pilot Plant Two Hills, Alberta Section D Introduction Genoil GHU Hydroconversion Complete Process Facility Section E Genoil GHU Hydroconversion Technical Section Section F Financial Data & Business Model

3 Refiners face tremendous pressures to maintain profits, whil e Section A General Introduction and Market Overview

4 GROWING NECESSITY FOR RESIDUAL UPGRADING Access to light, sweet crude is costly due to diminishing supplies Refiners face tremendous pressures to maintain profits, whil e Refinery Crude Runs For Selected Markets Source: Purvin & Gertz Inc. Regional Upgrading Report

5 GROWING NECESSITY FOR RESIDUAL UPGRADING Residual fuel supplies continue to increase as demand for residual fuels continues to decline Figure 4. World Residual Supply / Demand Source: Pervin & Gertz Regional Upgrading Report

6 GROWING NECESSITY FOR RESIDUAL UPGRADING Demands for high quality transportation fuels continue to rise, requiring additional crude processing or investments in residual upgrading Figure 3. Global Consumption, Transportation Sector

7 RESIDUE UPGRADING PROCESSES Process Temperatures Conversion Visbreaking ( o C) ( o F) Delayed Coking ( o C) ( o F) Fluid Coking ( o C) ( o F) Ultrapyrolysis > 600 ( o C) >1,112 ( o F) Low High High High Fluid Catalytic Cracking (FCC) Hydroprocessing (Hydrocracking) ( o C) ( o F) ( o C) ( o F) High Flexible Medium to High

8 Section B Introduction Genoil GHU & Hydroconversion

9 FEATURES OF THE HDC RESIDUE UPGRADING PROCESSES Process Fixed Bed Swing Fixed Bed Moving Bed Ebullate Bed Slurry Bed Number of units demo Pressure, bars Temperature, o C LHSV, h Operability Good Good Medium Medium Difficult Ni + V in feed, wppm < >700 >700 Conversion to 550C-, % Product Residue Stability Good Good Good Medium Bad Cycle length, months 6-12 >12 Continuous Continuous Continuous Relative catalyst Consumption N/A Vol% catalyst in reactor ~60 ~60 ~60 ~40 ~1

10 CONVERSION TECHNOLOGY DIFFERANCES The 2 most popular ways of converting low-value sour heavy fractions of crude or residue oils are: Coking removing the carbon molecules or Hydrotreating / Hydroconversion / Hydrocracking (removing Sulphur and other contaminates by hydrogen addition) Coker upgrading produces lighter fractions requiring hydrotreating in separate streams prior to recombining the method used to produce syncrude 20% of the coker feed oil is converted to low-value coke Hydroprocessing / hydroconversion uses catalysts in a hydrogen rich environment to: Crack the heavy hydrocarbon molecules into lighter fractions Remove the crude contaminants (sulphur, nitrogen, metals)

11 GENOIL HYDROCONVERSION UPGRADER (GHU TM ) ADVANTAGES Higher liquid yields than coking processes Output of hydroconversion is % of liquid input volume versus approximately 80% for upgrading using the coking process Capability to adjust product slate to meet increasing demand for low sulphur petroleum products including diesel and gasoline Stability of upgraded crude produced in hydroconversion process is superior to coked products such as the syncrude processed today Moderate operating conditions, temperatures and pressures allowing for simple reactor design with lower CAPEX and OPEX Lower operating and capital costs per barrel when compared to known hydrogen addition processing schemes using like technology

12 HYDROCONVERSION USING GHU PROCESS Process Fundamentals The Challenges we faced: Hydrocracking processes break larger molecules into fragments of various sizes Mild cracking conditions create high yields of middle distillates Full Hydrocracking requires longer residence time while Hydrotreating is not sever enough to upgrade sour heavy oils or residue To minimize coking at high pressures & by hydrogen addition Factors Affecting Reactions Mass transfer characteristics (diffusion barriers Genoil s focus) Catalyst, type, shape, etc. Fluid dynamics factors geometry of reaction vessel, reactor internals Temperature and pressure Hydrogen / Oil ratio

13 HYDROCONVERSION USING GHU PROCESS MILD HYDROTREATING PROCESSES GHU HYDROCONVERSION SEVER HYDROCRACKING PROCESSES

14 GENOIL TECHNOLOGY PROFILE Hydroconversion Upgrading Technology Upstream: GHU upgrading facility in oil producing field to convert high sulphur, heavy oils to lighter fraction oil increasing the value and product slate of each barrel of oil Downstream: GHU in refineries is used for the conversion of atmospheric and vacuum tower bottoms, increasing the product slate and volumes of distillates per barrel and unload existing coker to increase capacity Patented Technology - US patent February 21, 2006 No. 7,001,502 B1, Canadian patent pending and World Wide PCT coverage Genoil Hydroconversion Upgrader Commercialization Downstream (Refineries): Test Completed for new 1,250 bpd HVGO/VTB hydroprocessing unit, LOI for 20,000 BPD in China and MOU signed for refinery in Romania Upstream: Easter Europe Heavy Oil Field & Surge Energy Tar Sands

15 HYDROCONVERSION USING GENOIL s GHU PROCESS GHU Upgrading facility is a total process solution that Targets conversion of high sulphur heavy feedstocks (sour heavy crude, VTB s / ATB s residues and other heavy oils) to lighter products Combination of guard bed and fixed bed reactor designs to maximize processing of crude or residual oils. desulphurisation (>90%) demetallization (>70%) denitrogenation (>50%) API increase to sweeter and lighter oils during the conversion process Proprietary process design and mixing devices Produce very high mass and heat transfer between hydrogen, the feedstock and the catalyst Partial conversion Hydrocracking is achieved at moderate severity operating pressures and temperatures

16 Section C Genoil GHU Pilot Plant Two Hills, Alberta

17 GHU TM DEMONSTRATION FACILITY IN TWO HILLS, ALBERTA Genoil owns and operates a 10 bpd hydrotreating upgrader complete with an independent water electrolysis unit for high purity hydrogen supply, hydrogen compressor, electrical substation, fired heater, low-pressure separator for vapour-liquid separation, and a PLC for automated operational control. The GHU is equipped with online gas chromatograph, hydrogen analyzer, and mass flow/density meters. PLC and process data are monitored and recorded in real time.

18 GHU TM DEMONSTRATION FACILITY IN TWO HILLS, ALBERTA

19 Section D Introduction Genoil GHU Hydroconversion Complete Process Facility

20 GHU UPGRADING FACILITY COMPLETE PROCESS SCHEME HYDROCONVERSION FACILITY Genoil has continued to improve our technology while looking at the larger picture of what is required for a stand alone facility or better utilization of resources to lower operation cost, produce hydrogen, power and steam in a cost effective manor. Working with clients to meet their needs we have combined our technology with others to offer a complete process solution and a bottomless barrel of upgraded crude of residual oil. COMPLETE PROCESS SCHEME The heavy residue fraction that is not upgrade is used for production of syntheses gas, then hydrogen production as required by the process, and finally integrated with a IGCC process for the production of power and steam. The upgraded crude will have no residual fraction making the each barrel processed through the facility a bottomless barrel for sale to the refiner.

21 GENOIL HYDROCONVERSION PROCESS FACILITY PLAN

22 GENOIL HYDROCONVERSION BASIC FLOW DIAGRAM

23 COMPARISON COKER UPGRADER BASIC FLOW DIAGRAM

24 GHU FACILITY INTERGRATED WITH PETROCHEMICAL COMPLEX New GHU Upgrading Section

25 Section E Genoil GHU Hydroconversion Technical Section

26 HEAVY HIGH SULPHUR CRUDE UPGRADING RESULTS WITH GHU TM In a pilot plant program with a HEAVY OIL FEED of 12.5 API and 3.26% sulphur, the GHU TM upgraded the product to: A 30.4 API gravity with: 92% desulphurisation 60% denitrogenation 63% Conradson Carbon (CCR) conversion

27 HEAVY HIGH SULPHUR CRUDE UPGRADING RESULTS WITH GHU TM Temperature, degrees C Temperature, degrees C N K LGO HGO VGO 100 G N K LGO HGO VGO Evaporated Volume, % Evaporated Volume, %

28 OPERATING RESULTS FROM GHU TM BITUMEN UPGRADING

29 OPERATING RESULTS FROM GHU TM BITUMEN UPGRADING

30 OPERATING RESULTS FROM GHU TM HEAVY OIL UPGRADING In another extensive pilot plant program with a Heavy Oil Feed of 17.5 API and 1.2% sulphur, Genoil was asked to upgrade to a product with: A gravity of 32.0 API 0.6 wt% sulphur (50% desulphurisation) Maximum vacuum residue conversion

31 OPERATING RESULTS FROM GHU TM HEAVY OIL UPGRADING Genoil conducted a series of 12 pilot plant runs to confirm the required operating conditions to meet the product objectives (Upgrade crude gravity to minimum of 32.0 ºAPI and sulphur content below 0.6 wt%). Tests were conducted at pressures between 120 and 128 kg/cm2 (1,700 to 1,825 psig) with standard available catalyst Temperatures between 377 and 430ºC (711 to 806ºF). Overall catalyst space velocity (LHSV) of 0.40 to 1.0 for a one to two year catalyst cycle.

32 OPERATING RESULTS FROM GHU TM HEAVY OIL UPGRADING At the previous temperatures and pressures: Desulphurization: 75 to 97% Denitrogenation: 37 to 53% Demetallization: 76 to 98% Conradson Carbon reduction: 47% to 87% Pitch conversion: 37 to 88%

33 OPERATING RESULTS FROM GHU TM HEAVY OIL UPGRADING At the selected operating conditions Heavy Oil Feed Produced Crude Product API Gravity Specific Gravity Sulphur, wt% Metals, wppm 77 <1.5 Conradson Carbon, wt% 7.4 <1 Nitrogen, wt% Aromatics, % C, wt% (vol%) (77.9) 509+C, wt% (vol%) (51.8) 535+C, wt% (vol%) (42.1) 5.04 (4.23)

34 OPERATING RESULTS FROM GHU TM HEAVY OIL UPGRADING At the selected operating conditions: Desulphurization: 97% Denitrogenation: 53% Demetallization: 98% Conradson Carbon reduction: 87% Pitch conversion: 88%

35 OPERATING RESULTS FROM GHU TM HEAVY OIL UPGRADING Crude Product Yields Full Range Naphtha Kerosene Heavy Diesel Vacuum Gas Oil Vacuum Residue TBP, C IBP to to to to TBP, F IBP to to to to Weight, % Volume,%

36 OPERATING RESULTS FROM GHU TM HEAVY OIL UPGRADING Full Range Naphtha Properties TBP, C (F) IBP 200 (IBP 392) API Gravity 52.0 Specific Gravity Sulphur, wppm 15 Nitrogen, wppm 110 RON/MON 46/52 Smoke Point, mm 22

37 OPERATING RESULTS FROM GHU TM HEAVY OIL UPGRADING Kerosene Properties TBP, C (F) ( ) API Gravity 33.4 Specific Gravity Sulphur, wppm 20 Nitrogen, wppm 410 Cetane Index 42.1 Smoke Point, mm 13 Freeze Point, C (F) -41 (-42)

38 OPERATING RESULTS FROM GHU TM HEAVY OIL UPGRADING Heavy Diesel Properties TBP, C (F) ( ) API Gravity 26.7 Specific Gravity Sulphur, wppm 300 Nitrogen, wppm 1,090 Cetane Index 42.0 Pour Point, C (F) -24 (-11) Freeze Point, C (F) -10 (14)

39 OPERATING RESULTS FROM GHU TM HEAVY OIL UPGRADING Vacuum Gas Oil Properties TBP, C (F) ( ) API Gravity 20.6 Specific Gravity Sulphur, wppm 650 Nitrogen, wppm 2190 Metals, wppm <1 Asphaltenes, wt% 0.11 Conradson Carbon, wt% 0.02

40 OPERATING RESULTS FROM GHU TM HEAVY OIL UPGRADING Vacuum Residue Properties TBP, C (F) 535+ (995+) API Gravity 5.3 Specific Gravity Sulphur, wppm 1590 Nitrogen, wppm 5300 Metals, wppm 8.5 Asphaltenes, wt% 4.4 Conradson Carbon, wt% 24.0

41 RESIDUE & HVGO UPGRADING IN A REFINERY WITH GHU TM Testing has been completed for the first commercial refinery retrofit of the GHU TM technology in a refinery The Genoil Hydroprocessing Upgrader will process distillation residues from the refinery (bottoms of the barrel) GHU test and preliminary design were for a 1,250 bpd of proposed facility processing atmospheric residues

42 RESIDUE & HVGO UPGRADING IN A REFINERY WITH GHU TM Waxy Heavy Vacuum Gas Oil & VTB Feed Properties Density, kg.m3 913 API Gravity 23.4 Sulphur, wt% 1.99 Total Nitrogen, wppm 1,000 Wax, wt% 22.5 Pour Point, o F 102 Carbon Residue, wt% 0.21 Distillation Fractions IBP to 200 o F to 360 o F to 530 o F to 750 o F o F

43 RESIDUE & HVGO UPGRADING IN A REFINERY WITH GHU TM In a recent client assessment, waxy ATB / VTB residue of 22.3 API with 1.63 wt% sulphur were upgraded using the GHU TM to a 38 API gravity product with just 91ppm sulphur. Over 73% of the HVGO and heavier were converted into higher value products at moderate operating conditions Hydroconversion of Waxy Residues Feed % Product % Heavy Naphtha Stove 1 22 Diesel HVGO Total 100% 100% The sulphur component in the diesel cut was reduced to 50 ppm. This approaches the new ultra-low sulphur regulations.

44 RESIDUE & HVGO UPGRADING IN A REFINERY WITH GHU TM Overall refinery yield changes after using a GHU for ATB, VTB and HVGO hydroprocessing; Differential price between feed & product: $ 14 to $ 25 per barrel Based on third party engineering calculations, the IRR of incorporating a GHU installation into this 11,000 bpd refinery would be 44%.

45 UPSTREAM PROJECT: SURGE ENERGY TAR SANDS PROJECT First commercial 10,000 bpd GHU Upgrader in North America will be for a tar sands project Upgrade bitumen gravity from 9 API to 34 API Sawn Lake Alberta field contains 820 million barrels of heavy oil that the GHU will convert to light oil Spread between heavy oil and light oil at $ 14 - $ 25 per barrel (Jan 2006) Spread between tar sands feed and light oil closer to $ 25 to $ 35 per barrel After costs, profitability estimated at well over $10 per barrel

46 DOWNSTREAM PROJECT: HEBEI ZHONGJIE PROJECT Letter of Intent with Hebei Zhongjie PetroChemical Group, China, signed on September 2006 to proceed with Genoil GHU TM upgrader installation. Previous MOU signed in February. First major commercial 20,000 bbl/d upgrader to increase quality and quantity of crude entering the refinery will be constructed on the refinery property. September 2006: representatives from Hebei Zhongjie visited the Genoil pilot facility in Two Hills. Genoil will work on engineering and design package, while Hebei Zhongjie will ship oil to be processed at pilot upgrader

47 REFINERY RETROFITS INCORPORATING A GHU TM A residual upgrading strategy incorporating a GHU TM offers refiners greater opportunities to: Purchase heavier feedstocks and still maintain a light product slate while recovering valuable fuel stocks allowing for better bottom of the barrel management Meet growing demands for low sulphur, light fuels by removing over 90% of the sulphur and converting the heavy fraction of a barrel into lighter fuel product feedstock Increase profit margins on refining process Help comply with worldwide government mandates for low sulphur products

48 CLIENT TESTING The Genoil pilot plant upgrader is ideal for demonstrating the benefits of incorporating a GHU TM either into an existing refinery, or for field upgrading The feedstocks are shipped from the client operations to the Genoil upgrader site in Two Hills, Alberta Genoil engineers complete the pilot plant tests, and establish the mass and heat balances for a GHU TM installation and supply customers with complete analysts of upgraded product and distillation curves for the product. Feed and product analyses are done by accredited third party laboratories (Maxxam, NCUT or Core Lab) A minimum of barrels of feedstock (crude/bitumen or residue) is required for GHU TM testing

49 Section F Financial Data & Business Model

50 SALES CRUDE BLEND MIXED TO EXPORT HEAVY CRUDE MIXED CONDENSATE AND HEAVY CRUDE 100,000 BPD CAPACITY Per day Net Sales 50% Condensate (Distillate) 50% 12 API Heavy Crude Mixed for Export or used in ORC Refinery Value of Blended Sales Crude 100,000 BPD X $ $ 5,400,000 Bases value for each of the component to blend Export Grade crude 50,000 BPD Condensate $ = $ 2,850,000 50,000 BPD Heavy Crude $ = $ 1,750,000 Blended Total Value $ 4,600,000 Value of Blended Crude Sales 100,000 BPD $ = $ 5,400,000 Net Gain in Value $ 800,000

51 SALES CRUDE UPGRADED IN GHU UPGRADING FACILITY 100,000 BPD CAPACITY WITH SEPARATE CONDENSATE SALES Per day Net Sales 50,000 BPD Condensate 50,000 x $ per barrel Can be used a Chemical Feed Stock vs. used for Mixed Export Blend $ 2,850, ,000 BPD Heavy Crude Genoil GHU Upgrading Facility 100,000 BPD Upgraded Crude 100,000 x $ per barrel $ 5,200,000 Operating Expenses Less Operating Cost 4.00 per barrel $ 400,000 Less Cost of Capital 2.50 per barrel $ 250,000 Less Hydrogen Cost 2.00 per barrel $ 200,000 Total daily cost $ 850,000 Total Net Sales $ 8,050,000 Less Operating $ 850,000 Sales Less Expenses $ 7,200,000 Total Net Gain Per Day $ 1,800,000 Difference between Mixed Crude Sales and Upgraded Crude sales based on 100,000 BPD

52 RESIDUE & HVGO UPGRADING IN A REFINERY WITHOUT GHU HVGO / Residue refinery output 1,250 BPD at $ = $ 37,500 income sold as Cat Feed to Neighboring Refining

53 RESIDUE & HVGO UPGRADING IN A REFINERY WITH GHU Refinery income after upgrade and recycle of HVGO / Residue by $ 150,969 Dollars Per Day vs. $ 37,500 Dollars Per Barrel sold as FCC Feed or an increase of $ 113,469 Dollars Per day in income 9% Naphtha 22% Kerosene Genoil GHU 48% Diesel 21% VGO 1,250 BPD Reside Feed Upgraded and increased to 1,443 BPD Product Refined: BPD Naphtha $ = $ 59, BPD Kerosene $ = $ 27, BPD Diesel $ = $ 64, BPD VGO + $ = $ 7,020 Recoverable Product Dollars = $ 150,696

54 Project A Description A GHU unit will be located within the boundaries of an existing international petrochemical facility and tied into the existing refining side of the complex utilizing existing utilities and power grid. Operating Detail The GHU unit will be designed and constructed to upgrade 20,000 BPD of heavy high sulphur Russian M380 feedstock and will be part of a planned capacity increase of 1.5 million tons per year to the existing petrochemical complex. The M380 feedstock will be upgraded in the GHU unit reducing the sulphur content and increasing the API to a level close to WTI (40 API and 0.50% or less sulphur.) This upgrade will allow the international petrochemical facility to utilize the lower cost heavier feedstock in a refinery that is designed for light sweet feed and allow the refinery to produce at least the same or, best case, a better product slate from the heavier low cost feed stock. The upgraded crude will be added in feed stock to the existing refining operation for now but may at a later date be diverted to a new ADU / VDU where it will processed into final product without having to be run through the existing refinery and added directly to the sales product pool. Tankage and utilities are available within the existing refining scheme to support the GHU installation. The facility will require an operations staff of 6-to-10 operators working shifts based on 24 hours per day of operation.

55 Project A Description (continued) Revenue Genoil s revenue would be 20 million for license fees and total engineering package. Genoil will also oversee the installation at the international facility and will have additional revenue of $2- to-4 million for the ECM (engineering construction management) once the project moves to the field for erection. In addition to license and ECM revenue, Genoil will receive two-times the total capital investment made into the project as repayment of original investment that should occur with the first 5 years, and 10% of all profit generated based on the difference between the price of the M380 crude a low cost feed stock and the price of WTI which, at this time, appears to be $20-to-25 dollars per barrel. Based on this structure, Genoil will receive between $7.5 million-to-15 million dollars per year after repayment of capital for the life of the facility which is estimated at a minimum of 20 years.

56 Project A Description (continued) Costs The total engineering package is estimated to be 20% of the total project cost at this time. Genoil will provide the process engineering, detailed engineering, fabrication and construction services for this project, working with an international engineering company. The operation cost are calculated to be $8.50-to per barrel at this time, but may be 30% lower based on operating internationally. Current Project Status The project is currently moving forward on schedule as Genoil is working on the feed study to narrow down the exact configuration of the facility and hone in on the capital cost once the preliminary design is complete. The international facility is in the process of sending oil to our pilot facility in Alberta for testing and our engineering staff will visit the refinery this February, 2007 to finalize the design conditions.

57 Project B Description Detail This project is based on a 50,000 barrel per day stand alone international facility. Units will be installed to remove the high sulphur content, lower acid and nitrogen content The units will also increase the API of high sulphur crude and heavy crude found in this international region.

58 Project C Description Detail This proposed project is for a total of 60,000 barrels per day of upgrading capacity. The upgrading capacity is based on 3 each, 20,000 barrel per day trains and a complete stand alone facility with integrated syn-gas production, hydrogen production and recovery, and co generation to produce steam and power for the facility. Genoil will license the technology to the facility and provide a Schedule "A" engineering package to the EPC contract of the facility s choice. Genoil will act as the facility s engineer and oversee the construction, installation and start up of the new train. Genoil will have no responsibility for the supply of equipment or the construction of the facility.

59 Revenue Pipeline

60 Historical Cost Structure

61 Assumptions 6 new engineers per project $120-$170K per engineer (fully burdened) 1 project manager (engineer) 5 supporting engineers 2 new sales/marketing $70-$120K salary per (fully burdened) Plus commission 1 new finance/accounting $70-$120K salary per (fully burdened)

62 Contact: David K. Lifschultz Chief Executive Officer 2833 Broadmoor Blvd., Suite 120 Sherwood Park, Alberta, T8H 2H3, Canada Tel: (914) Fax: (914)