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PAPER 2008-329


Improving Athabasca
Bitumen Development
Economics through
Integration with HTL
Upgrading
ED KOSHKA
JOE KUHACH
ED VEITH

Ivanhoe Energy Inc
This paper has been selected for presentation and
publication in the Proceedings for the World Heavy Oil
Congress 2008.
All papers selected will become the property of WHOC. The
right to publish is retained by the WHOCs Publications
Committee. The authors agree to assign the right to publish
the above-titled paper to WHOC, who have conveyed non-
exclusive right to the Petroleum Society to publish, if it is
selected.
ABSTRACT
Ivanhoe Energy Inc.s proprietary heavy oil to light oil
(HTL) upgrading technology is designed to cost effectively
process heavy oil in the field and produce a stable, significantly
upgraded synthetic oil product along with by-product energy
which can be used to generate steam or electricity. HTL
improves the netbacks to a heavy oil producer by reducing or
eliminating the need for natural gas and diluent, and captures
the majority of the heavy to light oil price differential. HTL
accomplishes this at a much smaller scale and at lower per
barrel capital costs compared with established competing
technologies.
The HTL upgrading process is ready for full scale
commercialization. The technology was piloted in 1998 using
various heavy crude sources. A commercial demonstration
facility with a feed capacity of 1000 barrels per day was built
and operated since 2004, successfully proving the viability of
the technology at a larger scale.


INTRODUCTION
In mid-2005, Ivanhoe Energy Inc. acquired a new patented
process, called Rapid Thermal Processing (RTP), for the
field-located upgrading of heavy oil and bitumen. This patented
process will be used to upgrade heavy oil to light oil (HTL) to
enable the economic development of heavy oil and bitumen
resources worldwide.
There are significant accumulations of heavy crude and
bitumen throughout the world, much of it "stranded" or
economically constrained, which can be targeted by this
technology, thereby providing access to reserves. Much of the
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remaining unexploited petroleum reserves in the world are
heavy and extra heavy (bitumen). Both Canada and Venezuela
have extensive heavy oil reserves which compare in size to
current reserves in the Middle East. As conventional, lighter
crude oil supplies decline, these will need to be replaced by
heavier crudes. As heavy crude production increases deep
conversion capacity will also have to be expanded.
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The capital cost to construct large upgrading facilities using
traditional technologies has increased dramatically resulting in
challenging economics and in some cases cancelling or
deferring upgrading projects in Albertas oilsands. The HTL
TM

upgrading technology is economic in field-sited modules as low
as 10,000 to 15,000 bpd, thereby allowing producers the ability
to dramatically improve project economics and reduce the risk
of heavy oil development in a capital-efficient manner. HTL
TM

provides an attractive option to build upgrading capacity,
integrated with field development.



HTL
TM
PROCESS DESCRIPTION
The HTL
TM
process uses a circulating transport bed of hot
sand to quickly heat the heavy feedstock and convert it to
lighter, more valuable products. The following description is
representative of the range of general commercial process
configurations (High Yield and High Quality) applicable to
heavy oil or bitumen upgrading.

Pre-fractionation
In a commercial HTL
TM
facility, the whole heavy oil feed is
sent to a series of distillation towers, where material with a
liquid boiling point below 900-1050 F is removed in a vacuum
tower. The lighter material is later recombined with the
upgraded liquid product to form transportable synthetic crude.
The vacuum tower bottoms (VTBs) are routed to the HTL
Reactor. The general process flow is shown in Figure 1

HTL Reaction Section
The heavy oil residue feed or VTB is sprayed into the
reactor where it is mixed with hot circulating silica sand as
illustrated in Figure 2. This mixture is transported up through
the reaction zone by transport or carrier gas. Recycled product
gas (or by-product gas) is used as the transport gas. Rapid
mixing of the VTBs and sand promotes effective heat transfer
and thermal cracking of the heavy feedstock. Carbon is rejected
as the long hydrocarbon chains are cracked and coke is
deposited on the sand during thermal conversion. When long
chain hydrocarbons are cracked, the boiling point is reduced
and the cracked product is vaporized. The coke covered sand,
vapor (cracked VTBs), transport gas and feed that survive the
first pass in the reactor are separated in a high temperature
cyclone system. The cracking reaction is rapidly quenched with
light oil to minimize undesirable secondary thermal cracking
reactions. Reaction residence time of a few seconds improves
the conversion selectivity and product stability compared to
other thermal cracking technologies.

Product Fractionation
Following quenching, the liquid product can be routed to the
product tank for blending (High Yield). Alternatively,
atmospheric bottoms can be recycled to the vacuum tower feed
where unconverted resid can be cracked to extinction producing
a High Quality product. Part of the non-condensable gas is
recycled to the reactor system to be used as transport gas for the
circulating sand, with the balance, or net product gas, used to
generate steam and/or power in a Waste Heat Boiler (WHB).
All liquid products, including the light liquids from the whole
crude which are separated in the pre-fractionation step, are
blended to make a synthetic crude product. In the High Yield
mode of operation the resulting quenched product is routed to
the product tank where it is blended. By varying the amounts of
remaining residue recycled back to the reactor, the operator can
optimize desired product quality specifications and field energy
needs.

HTL Reheater Section
The coke covered sand from the HTL Reactor is
separated from the product vapor stream via a high-efficiency
cyclone and directed to a fluidized bed reheater for carbon
removal. Air is injected into the reheater to fluidize and
regenerate the sand. The regenerated sand is adjusted to the
proper reactor temperature in a sand cooler where excess heat is
recovered prior to circulation back to the reactor. High pressure
steam can be generated from the heat recovered in the sand
cooler. Operation of the circulating sand system is similar to a
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conventional fluid catalytic cracker (FCC) and residue fluid
catalytic cracker (RFCC). FCC fluid solids systems have been
in use for over 60 years. The design and operation of such
similar processes is widely known and will be incorporated into
the HTL
TM
commercial design thereby minimizing operations
risks

By-product Heat, Flue Gas Treatment and
Solids Handling System

Sorbent is added to improve HTL
TM
product characteristics
and minimize flue gas emissions. A portion of the sorbent is
added to the heavy oil feed to the Distillation Tower section to
reduce the total acid number (TAN) of the feed and to capture
sulphur released in the reactor section. The rest is added to the
reheater in order to capture SO
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which is formed as the
normally high sulphur coke is burned off of the sand grains. The
sorbent also acts as a site for the metals deposition.
Flue gas from the reheater is directed through a cyclone
system to remove ash, spent sorbent, and any sand fines from
the gas prior to passing through a power recovery turbine. High
pressure steam production is possible by energy recovery from
the hot flue gas, plus burning excess by-product gas, in a WHB.
This approach maximizes the useful energy output from the
process, either as high pressure steam or as power available for
onsite facility use with the excess exported for use in heavy
oilfield production operations.
Since sorbent is added to the feed and reacts with sulphur
released in the reactor section, the by-product gas is low in
sulphur and can be sent to a fuel gas system and used for
another purpose if the steam and or power requirements can be
met by the combustion of the by-product coke.
Flue gas polishing to meet SO
2
emission requirements
through a flue gas de-sulphurization unit (FGDSU) is also
included as part of the flue gas system. The amount of sorbent
used for flue gas cleanup can be optimized along with the
conventional FGDSU based on local needs. The ash, spent
sorbent and sand fines are routed to an ash cooler and collected
in a hopper, ready for disposal as a non-hazardous solid waste.


HTL ADVANTAGES

Viscosity Reduction and Quality
Improvement

HTL
TM
upgrading dramatically reduces feedstock viscosity
and increases API gravity of heavy crude. During the
upgrading process, asphaltenes, which contribute to very high
viscosity, are cracked into lighter and more valuable products or
removed by conversion to coke. The heavy fraction of the feed
that does not boil under the atmospheric pressure conditions of
the process stays in close contact with the sand, which
facilitates its rapid decomposition into smaller molecules and
coke. Even in a once through or High Yield configuration the
HTL
TM
process will destroy in excess of 90% of the
asphaltenes.
The reduction in the +1000 F cut is seen more explicitly on
Figure 3. The cracking of the heaviest portion of the barrel into
lighter products increases the quality of the product by reducing
the density of the feed and increasing the yield of higher value
products such as gas oil at the expense of lower value residue.
High Temperature Simulated Distillation curves from pilot
plant tests are presented for the case of using Athabasca
bitumen as the feed. The bitumen was processed in both a High
Yield (once through) and High Quality (recycle) configuration.
For the High Quality configuration, the 1000+ F fraction of the
Athabasca bitumen feed is reduced from 52 wt% and can be
eliminated entirely. This corresponds to a 33 wt% increase in
the VGO cut (650-1050 F).
In addition to the dramatic viscosity reduction and
conversion of high boiling point hydrocarbons, there are other
characteristics of the HTL
TM
process which add value. These
include the reduction in metals content and acid number of the
upgraded product compared to the raw feed. A calcium-based
additive can be introduced to the reaction system to serve as a
sorbent. As the sorbent interacts with the oil in the upgrading
process, it reduces the total acid number (TAN), absorbs
sulphur in flue gas, facilitates metals removal and effectively
reduces sulphur from by-product gas.



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Liquid Yield and By-Product Energy
The three main yields from the upgrader are C5+ liquid, C4-
LPGs and non-condensing gas, and coke. The HTL
TM
process
has the ability to achieve higher C5+ yields than delayed
coking. The reason for this is the kinetics of the process. A
unique combination of very short contact time with sand, short
residence time of the flashed distillable oil fraction in the high
temperature zone (helps to minimize secondary cracking
reactions), complete lack of porosity and surface catalytic
activity of sand, and a high ratio of sand-to-oil helps to achieve
higher liquid yields and lower by-product gas make as
compared to delayed coking.
Liquid yield (on a C5+ basis), as shown in Table 1, is 81 vol%
on a full recycle basis with Athabasca bitumen feed producing a
19 API, bottomless SCO that requires no diluent for pipeline
transportation. LPGs and lighter gases are also produced from
the upgrader. These can be combusted on site to produce
additional steam. Alternatively, these gases which could make
up to 6 wt% of the products could be sold and transported for
their heat value or as a petrochemical feedstock given their high
content of light olefinic material.
Coke produced from the thermal cracking of VTBs is
combusted in the reheater in order to regenerate the sand. This
produces a large amount of energy which is then converted into
steam for use in enhanced oil recovery or could be used to
generate power. For Athabasca bitumen (with a residue content
of 52 wt%), the process can support a steam-oil-ratio (SOR) of
3, thereby effectively eliminating or reducing the exposure to
market conditions related to the purchase of fuel gas.

Product Value
In general, HTL
TM
products generated with High Quality
processing configuration are distinguished by the low
concentration or absence of vacuum residual, compared to the
corresponding native crude. In the High Quality configuration
the vacuum residue is either converted to coke or vacuum gas
oil (VGO) and lighter material.
Refiners value crude on the basis of the assay or distillation
and the quality of the individual cuts. It is anticipated that the
HTL
TM
SCO would be processed in a FCC cracking refinery
with sufficient hydrotreating capacity to remove sulfur and
nitrogen. HTL
TM
SCO would be substituted against other
medium sour conventional crudes. The percentage of total
crude diet that a specific refinery can process will depend on the
refinery configuration and processing capacity. Since the
HTL
TM
HQ product has no resid content, its value increases for
those refiners which have no or limited resid conversion
capacity. These refiners value VGO as a FCC feed more than
resid which would be blended into resid fuel oil. A comparison
of distillation characteristics between Hardisty Light crude and
HTL
TM
HQ reveals that the distillation cuts for naphtha and
distillate are similar as illustrated in Table 1. The major
difference is in the resid and VGO contents. HTL
TM
HQ value
is driven from the higher content of VGO at the expense of
resid. Using a refinery linear program to develop the product
yields results in a refining cracking value for HTL
TM
HQ that is
similar to Hardisty Light. In other words the price a refiner is
willing to pay for HTL
TM
HQ is similar to Hardisty Light crude,
after adjusting for distillation, sulfur and nitrogen contents.
Thus HTL
TM
HQ should receive a market netback price at
Edmonton that is a 12% to 15% discount to WTI for product
sales into the US Midwest.

Market Potential for HQ HTL SCO
Crude produced from Canada is connected to a market that
includes refiners in Western Canada, Washington State, the
PADD IV Rocky mountain region of the US, Onatrio and the
PADD II Midwest market. The target market for Canadian
produced HTL
TM
SCO would be the US Midwest market.
The total crude capacity of the connected markets for
Canadian crude is about 6.0 million barrels per day. As
mentioned, refineries processing medium sour crude would be
likely candidates for substituting HTL
TM
HQ SCO for medium
and light sour crude. This market represents about 3.2 million
barrels per day. Most of these refineries are either integrated
with upstream production or are coking based refiners which
would not be ideal candidates because of the absence of resid in
the HQ HTL
TM
SCO. Many refineries have been identified that
can process HTL
TM
SCO as a substitute for medium sour
conventional crude as a percentage of the blended crude diet.
Within the PADD II region alone there exists about 200,000
barrels per day of capacity to process HTL
TM
SCO. Beyond
PADD II, the US Gulf Coast is an even larger market with more
capacity to absorb HTL
TM
SCO. Several pipeline expansions
are planned to enable more Canadian crude to sell into the US
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Gulf Coast, which would further increase the capacity to absorb
HTL
TM
SCO.

ECONOMIC UPLIFT

HTL upgrading when used as a field upgrader associated
with a SAGD facility, adds tremendous economic value. The
key drivers include:
1. The elimination of diluent needed for transportation
of high density high viscosity heavy oil
2. The significant reduction or elimination of natural gas
to produce the bitumen and heavy oil
3. The capturing of a significant portion of heavy to
light price differential

As illustrated in Figure 4, an HTL upgrader can improve the
bitumen netback by over $10 per barrel of bitumen including
the capital and operating costs associated with the upgrader.
This Fort McMurray netback is based on $70 WTI, a natual gas
avoidance of $8.75/ mmbtu, a price netback for HTL
TM
HQ
SCO of $61.60/bbl or a 12% discount to WTI, a diluent price of
108% of WTI and a Dilbit price of $47.60/bbl. This netback
analysis also assumed a SOR of 2.8. Figure 4 shows the impact
of each value drive. The differential capture adds $14.00 to the
netback, avoiding expensive diluents adds another $13.65 per
barrel, and avoiding natural gas adds another $11.67 per barrel
to the netback. This is offset by the incremental operating costs
and the return on capital. The capital cost for a 30,000 B/D
upgrader, has been estimated to costs $26,500/B/D or almost
$800 million installed at Fort McMurray using the most recent
installed cost estimates (Q3 2007 Class IV estimate). The
return on this capital includes both amortization on a 12% lease
charge which works out to be around $13 per barrel. Since the
HTL
TM
plant in a high quality mode of operation yields 81%
per barrel of feed, a liquid yield loss results in a $11 per barrel
cost. Essentially this yield loss is offset by the natural gas
avoidance since the coke and light gases produced are converted
to steam, thereby eliminating the need for natural gas.
However, these additional operating and capital costs result in a
considerable improvement in the bitumen netback or $10.85/bbl
bitumen feed.
The improvement in cash flow and economics is substantial.
Figure 5 illustrates the dramatic increase in value HTL
TM

Upgrading brings to a standalone SAGD facility over a range of
crude price scenarios. It should be noted that the integrated
value at a low price scenario is sufficient to support project
development and improves the chances of obtaining project
financing. These same values used in a discounted cashflow
analysis results in an increase in after tax IRR of over 5% on an
integrated project over a standalone 30,000 B/D SAGD project
with a corresponsing increase in cashflow.
The key to enhancing value is to invest capital in an optimal
manner. In the past 5 years, capital costs in the refining
industry have risen dramatically. For example, costs to build
new Greenfield upgrading capacity in Albertas vast oilsands
have more than doubled from 2004 to 2007due to higher
equipment and labor costs seriously impacting the economics of
upgrading bitumen to synthetic crude oil
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. Therefore, a more
optimum way to produce bitumen is to reject the carbon at the
source, use the waste heat to generate the bitumen, and upgrade
enough to meet pipeline specifications thereby minimizing
capital costs. The refiner then adds the hydrogen necessary to
refine to the end product. Hydrogen addition in the field
increases the complexity and cost of the upgrader such as
hydrogen reformers, hydrotreaters, sulfur treatment and
handling, and the associated utilities and offsites. The HTL
TM

upgrader avoids much of this cost and produced a stable and
compatible product with a broad market acceptance.


HTL Path to Commercialization
The early applications of Ensyns RTP
TM
technology to
petroleum feedstocks were tested at Ensyns research facility
located in Ottawa, Canada. This nominal 20 bpd (~ 5 - 10 bpd
vacuum residue) pilot plant tested a variety of heavy oil,
bitumen, and vacuum residue feedstocks between 1998 and
2002. Dramatic feedstock quality improvements were seen in
the 90+ pilot plant runs.
Based on success of the pilot work, a commercial
demonstration facility (CDF) was designed and constructed
during 2003-2004. The primary objectives of this facility were
to confirm pilot plant data and scalability of the technology.
The CDF was designed to process 300 bpd vacuum residue for
an overall demonstration of 1000 bpd of California heavy crude
upgrading. The facility located in the heart of Californias
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heavy oil fields (see Figure 6) has been in operation since
December 2004. CDF processing of numerous whole crude oils
and vacuum residues between 2005 and mid 2007 confirmed
the results obtained in the pilot plant. Tables 2 to 4 show some
examples of pilot plant and CDF results. In all cases the level
of upgrade and associated liquid product yield of the HTL
TM

pilot plant processing are confirmed with the CDF results.
These data show that results from the larger scale CDF are
typically slightly better than those obtained from the pilot plant.
With confirmation of HTL
TM
product and yield results and
scalability, the CDF has been focused on testing 3
rd
party heavy
crudes since mid 2007.
To further facilitate testing of various heavy crude
feedstocks from around the world, a feedstock test facility
(FTF) is under construction. This facility will provide full
functionality for feedstock processing including pre-
fractionation capabilities not available at the CDF. The 10-15
bpd whole crude capacity (5 bpd vacuum residue capacity) will
allow for the physical production of the full spectrum of HTL
TM

high yield and high quality products. The scale of the plant will
be much more conducive to receiving and testing of feedstocks
from around the world. One of the drawbacks of the CDF is the
difficulty in transporting several hundred barrels of feedstock to
the plant for testing. The FTF will require a feedstock volume
that is much more manageable for transportation. The FTF will
be used as a cost effective means to test third party feedstocks,
optimize processing parameters, and generate additional
intellectual property. FTF commissioning is expected in the
second half of 2008.
Running in parallel with the construction and
commissioning of the FTF is the development of the
commercial basic engineering and design. Utilizing the totality
of the data generated from the CDF and augmented by pilot
plant data and earlier work performed by Colt Engineering,
SNC Lavelin and others, Ivanhoe and AMEC have begun basic
engineering design for non-site specific application of the
HTL
TM
technology. Completion of the basic commercial
design will expedite the front end and detailed engineering
associated with specific HTL
TM
projects.
Based on the work done to date, capital costs to build an
HTL
TM
upgrader are estimated to be $26,500/B/D for a Ft.
McMurray Alberta location updated to Q3, 2007. This cost
estimate includes all the process equipment for bitumen feed in
to SCO product as well as all associated utilities and offsites.


SUMMARY
The four key advantages that the HTL
TM
technology affords
to the heavy oil and bitumen producer are:
1. Ability to capture the majority of the price differential
between heavy and light oil.
2. Upgraded product does not require diluents or
blending agents to move the product through a
pipeline.
3. By-product energy is used to generate steam and/or
power.
4. Small scale is appropriate to grow field-sited
upgrading capacity along with resource development
(minimum scale of 10,000-15,000 bpd).
These features of the HTL
TM
technology enable the
producer to proceed with heavy oil and bitumen development
knowing that:
they will reduce their exposure to high heavy oil to
light oil price differentials,
they will not be exposed to volatile price swings and
availability of blending agents used to transport the
heavy oil to market,
their exposure to natural gas pricing and supply
concerns for steam generation is reduced or
eliminated,
this can be accomplished where the initial capital
outlay is matched to field development and is a
fraction of the cost of alternative upgrading schemes
and,
they can grow their upgrading capacity inline with the
field development.

Ivanhoe Energys HTL upgrading technology is a unique
thermal cracking technology that solves some of the
disadvantages that exist for delayed coking, fluid coking, and
visbreaking processes. Only the heaviest molecules in the
residue are thermally cracked in this selective thermal cracking
process. The technology is simple with known analogues in the
downstream industry (FCC and RFCC) and a track record of
on-stream efficiency established via the biomass application
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using the same core technology in seven commercial plants
over 16 years.
Since >90% of the asphaltenes in the heavy oil are
converted to coke , light oils and by-product gas in the process,
and since most of the metal impurities are eliminated in the
process, the upgraded oil product from the process could be
easily upgraded further to transportation fuels using
conventional refining technologies.
In summary, the HTL technology significantly improves the
economics of heavy oil and bitumen projects and provides, in
effect, a hedge on the risk exposure that heavy oil producers are
typically exposed to.

ACKNOWLEDGEMENTS
The authors would like to thank the management teams of
Ivanhoe Energy Inc. and Ensyn Corporation for permission to
publish this paper. Many individuals contributed to the
technology and commercial development but special mention
of, Mike Silverman and Austin Collins is warranted.
NOMENCLATURE
bpd = barrels per day
cSt = centistokes
FCC = fluid catalytic cracker
N = nitrogen
NCUT = National Centre for Upgrading
Technology
Ni = nickel
RFCC = residue fluid catalytic cracker
S = sulphur
TAN = total acid number
V = vanadium
VTBs = vacuum tower bottoms

REFERENCES
1. WEI, E. AND SARNA, M. E., Technical Review Update:
Ivanhoe/Ensyn RTP Upgrading Process, internal
Ivanhoe Energy report prepared by Purvin & Gertz Inc.,
July 2005.
2. FREEL, B. and GRAHAM, R.G., Internal Reports, Ensyn
Group Ltd., October 2002 April 2005.
3. Synenco Energy Inc. Company Presentation. November
2007. www.synenco.com
























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FIGURE 1: Processing in a High Quality mode: Vacuum tower bottoms are routed to the Reactor
where thermal cracking takes place. Upgraded VTBs (product) are quenched at the exit of the
Reactor Cyclone and routed to the Atmospheric Distillation Unit where distillate and lighter
material is sent to product tank and blended with straight run gas oils. Atmospheric bottoms are
recycled to the front end of the Vaccum unit to separate VGO and lighter material. VTBs can be
recycled to extinction depending on the site specific energy requirements.



FIGURE 2: HTL Core process showing the sand path through the Reactor and Reheater. Flow is
clockwise from the reheater up through the reactor and back to the reheater. Raw feed is pre-
fractionated in a Vacuum Distillation Unit, routing the straight run 1000 minus F fractions to a
product tank for blending in the final upgraded product.


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Athabasca Bitumen crude - RTP Llquid products July 25, 2004
HTSD BOILING POINT DISTRIBUTION
0
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w
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HTL-LP, Recycle
HTL-LP, Once-Through
Athabasca Bitumen, 8API
Athabasca Bitumen crude - RTP Llquid products July 25, 2004
HTSD BOILING POINT DISTRIBUTION
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Athabasca Bitumen, 8API
Athabasca Bitumen crude - RTP Llquid products July 25, 2004 Athabasca Bitumen crude - RTP Llquid products July 25, 2004
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Athabasca Bitumen crude - RTP Llquid products July 25, 2004
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HTL-LP, Recycle
HTL-LP, Once-Through
Athabasca Bitumen, 8API
Athabasca Bitumen crude - RTP Llquid products July 25, 2004 Athabasca Bitumen crude - RTP Llquid products July 25, 2004
HTSD BOILING POINT DISTRIBUTION
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Athabasca Bitumen crude - RTP Llquid products July 25, 2004 Athabasca Bitumen crude - RTP Llquid products July 25, 2004
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Athabasca Bitumen crude - RTP Llquid products July 25, 2004 Athabasca Bitumen crude - RTP Llquid products July 25, 2004
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HTL-LP, Recycle
HTL-LP, Once-Through
Athabasca Bitumen, 8API
FIGURE 3: High temperature simulated distillation results for Athabasca bitumen processed in
both the High Yield (Once Through) and High Quality (Recycle) configuration.




Figure 4: HTL Netback Improvement Over SAGD Only for Athabasca Bitumen. The economics
are based on a 30,000 B/D facility located in Fort McMurray Alberta. Product is a bottomless SCO
with an 81 vol% C5+ liquid yield. LPGs produced are used as fuel to generate steam to support
the steam oil ratio. The capital cost associated with the HTL upgrader is estimated to be
$26,500/barrel per day using Q3 2007 Fort McMurray adjusted costs.
10


Figure 5: HTL Upgrading adds significant cash flow to standalone SAGD operation. At $60/bbl
price scenario, HTL upgrading integrated with SAGD significantly improves the economics
compared to the SAGD only.



FIGURE 6: Ivanhoe Energys Commercial Demonstration Facility (CDF) located in a major heavy
oil field west of Bakersfield, California. The facility can process 300 bpd of VTBs or an equivalent
of 1,000 bpd of typical California heavy oil which has a residue content of approximately 33 vol%.
11

Table 1: HTL HQ Assay: HTL HQ SCO will be valued by cracking
refiners - similar to Hardisty Light crude. Much of the value
increase for HTL HQ is derived by the absence of resid and the
larger amount of VGO compared to Hardisty Light.






























Table 2: Raw heavy oil and High Yield product properties. Source: internal Ensyn and Ivanhoe reports
2
.
12































Table 3: Raw heavy oil and High Yield product properties. Source: Internal Ensyn and Ivanhoe
reports
2
.





























Table 4: Raw bitumen and High Yield product properties. Source: Internal Ensyn and Ivanhoe reports
2
.