PetroSonic JV
PetroSonic refers to the Company`s wholly-owned subsidiary that is focused on its heavy oil upgrading business.
The Company`s low frequency high amplitude sonic reactor rapidly de-asphalts heavy oil, typically increasing the oil`s API by 6-10 degrees. An optional second stage proprietary chemical process typically increases the API by an additional 6-10 degrees. This processing results in the following benefits:
- Sulfur content reduced by approximately 40%
- Metals content reduced by approximately 70%
- Lower viscosity, allowing the oil to be transported by pipeline
- Increased product prices and higher netbacks
PetroSonic has entered its first commercial operation through a 1,000 bopd joint venture (``JV`) in Albania. Under the JV agreement, PetroSonic`s private JV partner has committed $1 million plus existing lands and facilities in exchange for a 40% JV interest. PetroSonic is providing a sonic reactor in exchange for its 60% JV interest, allowing PetroSonic to effectively earn 60% of the net uplift of every barrel processed. The Albanian market is typical of many countries where PetroSonic sees a significant business opportunity as a result of large pricing differentials between untreated heavy oil and oil that has been de-asphalted through the PetroSonic process.