This contract establishes the structure of the new joint venture corporation which will be located in the Zhongie Industrial Park in the Hebei Province of the People’s Republic of China.
The composition of the new company will be in accordance with the ratio of their respective equity interest – 70% for Genoil and 30% with HYT. Genoil has negotiated with HYT an increase in profit percentage from 50% announced on October 28th, 2014 to 60% currently. Genoil has already approached lending sources for the new refinery and is in discussions with interested parties.
The commercialization of Genoil’s GHU within a large scale refinery represents a key stage in the Genoil GHU Development. A move into ownership is a major step forward for Genoil as until now the company has been principally a research & development firm. The new 1 million tons per year GHU based refinery will process heavy oil, low-grade atmospheric and vacuum-distillation bottoms and convert them into higher value, lighter distillates and finished transportation fuels [c5, c6, naphtha, light diesel fuel, heavy diesel fuel, vacuum gas oil, sulphur, and ammonia] for the Chinese and international markets. The new refinery will have pipeline access to the closest port.
Genoil owns and operates one of the largest and most advanced pilot & design test facilities in the world. Pilot design test and feasibility study were extensively conducted for this project by China Petroleum Engineering Co, Ltd – a division of China National Petroleum Corporation (CNPC), who just unseated ExxonMobil Corporation (XOM) as the third largest oil company in the world. This previous engineering work showed an internal rate of return on investment of over 55%.
"China is a dynamically growing market and is expanding its refinery networks. Their year over year oil import growth is 500,000 barrel per day. The recent Brent and WTI oil price plunge has not affected Genoil because our process is very profitable at current price levels. We can also take advantage of very favorable low steel prices. Genoil is in pole position in the fastest growing energy market in the world – a market that is heavily dependent on heavier feedstock. On my recent trip to China I was extremely impressed by HYT’s capable and qualified management and their intense interest in this project. We are destined to be successful with a supportive partner like them." says Bruce Abbott, President & C.O.O. of Genoil.
