Sonic Technology (Sonic) has entered into a joint venture (JV) in Albania to build and operate initially a 1,000bopd heavy oil upgrading facility.
The JV is with a private company which will provide an existing lease and facility that has been utilized in the past for crude blending operations. The private company will contribute an initial $1m in capital required into the JV.
Sonic, through its wholly-owned subsidiary PetroSonic, will provide the license for operating Sonic generators and the process for upgrading of heavy crude oil along with the initial one or two sonic generators to process 1,000 barrels per day of heavy crude oil.
The JV will be owned 60% by PetroSonic and 40% by the private company. Since much of the infrastructure is already in place at the private company’s facility, it is expected that the capital required to commence operations will be approximately $1m. The JV anticipates start-up of the facility in June 2010.
Over the next 30 days the parties intend to finalize a shareholder and license agreement and register a JV company in Albania, after which the private company will deposit the initial $1m capital commitment into the JV account. These funds will be utilized to cover costs associated with establishing operations.
Richard Wadsworth, president and CEO of Sonic, said: “I am pleased to be entering into a joint venture with an Albanian partner, bringing a clean upgrading technology to Albania where I believe we can improve the quality and economics of the heavy oil. With our clean de-asphalting and upgrading technology we can improve on the challenges Albania faces with its environmental, transportation, refining and energy needs.”
The PetroSonic process consists of a first phase of rapid de-asphalting of oil that is expected to increase the API of typical Albanian heavy oil by approximately 6-10 degrees, reduce sulphur and metals by 40% and lower viscosity by 99%.
The second phase of the process utilizes a chemical oxidation process, which can upgrade oil by an additional 6-10 API. The JV will initially focus on the first phase de-asphalting process. Once de-asphalting operations are established and cash flow is being generated, the JV plans to integrate the second phase.