Genoil has signed a $50bn letter of intent (LOI) with Grozneft to develop oil fields and construct clean technology upgraders, refineries and pipelines in Russia.
The project, which will incorporate Genoil’s clean technology hydroconversion (GHU) process, aims to produce 3.5 million barrels per day.
The Genoil's GHU is an advanced upgrading and desulfurization technology designed to convert heavy or sour crude oil into much more valuable light low sulfur oil for a very low cost.
It can be deployed at different locations either upstream at oil fields, or downstream at refineries, in a standalone form at ports and other logistical locations.
Genoil said it plans to explore ways to link the new project to existing pipeline networks in the region. The project will be backed by financing from Chinese banks.
Under the terms of the LOI, Genoil has agreed to build a new refinery in Chechnya with a refining capacity of 6 million tons per year.
As part of this effort, Genoil will lead a large consortium of Chinese engineering and services companies to provide necessary support and project guarantees.
Genoil Canada vice-president Thomas Bugg said: “The negotiation of this LOI marks an important milestone from Genoil, demonstrating that we can act as a service provider as well as a technology provider.
“Building on our previous Letter of Intent from a Chinese bank in April of this year, this latest agreement further supports our commitment to develop sustainable energy sources, helping to solve the supply challenges we face now and in the future.”
In April 2016, Genoil and its consortium partner Shaanxi Yanchang Petroleum Group subsidiary Beijing Petrochemical Engineering (BPEC) have signed $5bn letter of intent to cover the initial cost of an upgrade project in Middle East.
Image: Genoil will build a new upgrading project in Russia. Photo: courtesy of Genoil Inc.