RE: QFI & Valkor/Tomco30 Aug 2022 14:01
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The unique resource we have here is [...] that it's a virtually zero sulphur fuel, I know of nowhere else in the United States and only a few places in the entire world that have that, it's also low paraffin as far as bitumen goes.
One of the opportunities we have going forward, as we've been doing all our geology for the past two-and-a-half to three years here, we've also looked at unusual paths to market for this.
Because the heavy oil should be worth more than WTI because it's a rare resource, and all of the main places you get it in the world are gone. [...]. It can be used for a larger number of things than light, sweet crude can. For one, we already have offtakes for asphalt. If we take this and do some post-processing on site, we can take the diesel fraction -- so we'd have about 10-20% diesel, and the balance would be an extremely heavy API 6.5. Basically they call it asphalt concrete, it's just a binder for asphalt. All you need is to add some gravel and usually some bind material. And that's one way to market.
And so we avoid [capacity issues] because there's a limited amount of refining capacity for heavy oil in the state. [...] We've went [gone] to all the majors already. Here, all the refineries have maybe 5000 barrel per day capacity for cracking heavy oil like this. [...]
We're also conducting a trial next year with MSC. It's a big container shipping company. And if we take the heavy oil, the heaviest part is even the best, it can be mixed with a glycerine product, bioglycerin; it's a byproduct of biodiesel. And [plus] a little bit of water. And if you take those and emulsify them, it comes out looking like a number two diesel, so like a heating oil.
And it is, based upon the international regulations, that product has about a 30% carbon offset compared to conventional oil. Based on the full life cycle we've looked at because we're not refining. They glycerine adds about 15% to the BTU value and it's a zero-carbon one, theoretically. So we have a 170,000 bbl trial scheduled for the next year, 2023. And if that goes well, it competes favourably on the international market as biodiesel, even though it's a diesel product, because it goes by CO2 offset, not by source. It would be more than 30% we believe, we have demonstrated it on paper already and in the long term we can show a higher amount that would qualify as biodiesel; all the international shipping companies are required to use 15% of that. Currently selling at $300 a barrel. And it would be a direct replacement for that.
Long term we believe we can demonstrate a higher amount [of CO2 savings]
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