Ivanhoe Energy announces major technical breakthrough in its HTL (Heavy-to-Light) heavy-oil upgrading process

HOUSTON, Sept. 16 /CNW/ - Dr. Michael A. Silverman, Executive Vice President, Technology, of Ivanhoe Energy Inc. (TSX: IE - News; NASDAQ: IVAN - News), today announced a major technical breakthrough in the ongoing enhancement of the company's proprietary HTL (Heavy-to-Light) technology.

The breakthrough was achieved through a new process configuration developed by Ivanhoe Energy's in-house technical team at the company's newly commissioned Feedstock Test Facility in San Antonio, Texas. It confirms that the HTL technology now enables the production of "bottomless" synthetic crude oil through a simplified operation that delivers lower capital and operating costs. The benefits of this breakthrough will be realized in all of Ivanhoe's HTL heavy-oil projects, including the Tamarack Project in Canada, the Pungarayacu Project in Ecuador and additional target opportunities that have been identified in the Middle East, Asia, Africa, Latin America and Canada.

Ivanhoe's HTL heavy-oil upgrading technology is capable of operating in a wide range of process configurations, depending on the characteristics of the crude oil and the degree of upgrading required in each application. A number of identified heavy-oil projects target the production of bottomless synthetic crude, which is synthetic crude that has less than approximately 5% residual oil. Residual oil is the heavy, viscous fraction of crude oil.

Prior to Ivanhoe's development breakthrough, bottomless synthetic crude produced by the HTL technology required recycling of a portion of the processed oil through the core of the HTL facility until the required level of upgrading was achieved. While this is an effective and economically attractive process, it also requires over-sizing of the HTL equipment and presents engineering and operational complexities.

Dr. Silverman said the Ivanhoe breakthrough reduces the amount of oil required to be recycled through an HTL plant by greater than 80%. "We now can produce bottomless synthetic crude with a minimum of recycling, which allows equipment to be downsized and provides for a simpler operating environment," he added.

"This breakthrough is very welcome news for a wide range of Ivanhoe Energy's existing and potential projects and further enhances the advantages of field-located, HTL integrated production of bitumen and extra-heavy-oil. We now are proceeding to incorporate these technical developments in the engineering and design of commercial HTL facilities, which is being carried out by AMEC, of London, England."

The HTL advantages: economics, logistics and environment

Ivanhoe Energy's field-located, integrated HTL upgrading process addresses the principal key economic and logistical challenges related to heavy-oil developments. HTL facilities convert heavy, viscous crude oil in the field to a lighter, transportable synthetic crude oil with an enhanced value in the marketplace. In addition, upgrading by-products are converted on-site into steam or power that can be used in field operations or for export.

HTL frees the producer from the need to buy a) large volumes of natural gas for steam generation; and b) light oil as a blend agent for transport. In addition, integrated HTL upgrading allows the producer to capture the majority of the value differential between light and heavy oil. All of this is carried out in HTL facilities that are cost effective at scales as low as 15,000-20,000 barrels per day.

Integrated HTL upgrading also provides several environmental advantages.

Source: http://biz.yahoo.com/cnw/090916/ivanhoe_htl_technolgy.html?.v=1