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Petroteq Energy Inc
Symbol PQE
Shares Issued 259,879,594
Close 2020-09-15 C$ 0.10
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Petroteq receives pre-FEED study for oil sands plant

2020-09-16 10:01 ET - News Release

Mr. Alex Blyumkin reports

PETROTEQ ENERGY ANNOUNCES PRE-FEED STUDY CONFIRMS LOWER COSTS & INCREASED CAPABILITIES FOR COMPANY S ENVIRONMENTALLY BENIGN PROPRIETARY TECHNOLOGY

Crosstrails Engineering LLC, a subsidiary of Valkor LLC, has completed its pre-front-end engineering and design (FEED) (preliminary) design for a proposed 5,000-barrel-of-oil-per-day oil sands plant (single train) for Petroteq Energy Inc.. The same design, in a two-train configuration, can be used for a proposed 10,000-barrel-of-oil-per-day oil sands plant in eastern Utah for Greenfield LLC, a joint venture company between Valkor and TomCo Energy Ltd., that has a technology licence with Petroteq.

The purpose of the study was to confirm the technical feasibility of the plant and make a first estimation of capital cost. The study confirmed that an initial 5,000-barrel-of-oil-per-day train can be constructed using conventional oil processing equipment at an estimated cost of $92.5-million (U.S.), or $18,500 (U.S.) per nameplate barrel of oil per day. Pursuant to the study, it is believed that subsequent parallel 5,000-barrel-of-oil-per-day trains can be added for less owing to savings from shared infrastructure. The capital cost is inclusive of all engineering, project management, all equipment and systems, site construction, start-up, and commissioning sufficient to have a fully operational oil sands plant capable of processing oil sands ore into a high-grade bitumen product. The process is environmentally benign, uses no water in the extraction process, and produces bitumen and a clean sand that meets Environmental Protection Agency (EPA) Tier 1 standards as the only byproduct. The entire plant, except for mining and oil storage may be housed within buildings and will produce no significant emissions. An assumption for this design is that a contract mining company will be employed to deliver crushed ore to the facility and, as such, this estimate excludes the cost of mining equipment.

In addition, the study performed a basic economic analysis of the plant operation which demonstrates very favorable economics. It is estimated that the total incremental cost of production, including subcontract mining, fuel, electricity, operating staff and all expenses to extract a commercial petroleum product from oil sands ore, is estimated to fall below $30 (U.S.) per barrel (bbl), while targeting less than $25 (U.S.) per bbl in the next round of detailed design through incorporation of various optimizations, including heat recovery.

Because the design is based upon standard oil processing equipment, no required equipment has a lead time longer than 12 to 13 months. The schedule from project sanction to the start of commercial production is estimated at 15 to 17 months dependent upon prevailing market conditions at the start of procurement and plant construction.

Crosstrails Engineering is now commencing a FEED study to further refine the design. During the pre-FEED, all major equipment was identified and costed using historical information. In the FEED study, all major equipment will be defined, specified and quoted and the balance of plant will be estimated to determine capital expenditure to within plus or minus 15 per cent and bring the design to the point of beginning detailed design and procurement of long-lead items. This FEED is estimated to take approximately four months and is expected to further optimize operating costs, by determining energy and staff requirements, to arrive at an estimated total cost per produced bbl. Upon completion of the FEED study, and subject to financing, the project will be in a position to order long-lead items and begin detailed (final) design to start the clock toward construction of the first commercial plant.

George Stapleton, Petroteq chief operating officer, commented: "The company has been working with our engineering partners to improve production levels and this pre-FEED study incorporates all of the lessons learned during the initial debottlenecking of the pilot plant. Lessons learned as a result of upgrades currently under way at the pilot plant will be incorporated into the FEED study for the 5,000-barrel-per-day plant, resulting in an improved and robust design, which can only benefit future commercial production by Petroteq and its licensees."

About Petroteq Energy Inc.

Petroteq is a fully integrated clean technology company focused on the development and implementation of a new proprietary technology for oil extraction. The company has an environmentally safe and sustainable technology for the extraction and reclamation of heavy and bitumen from oil sands, oil shale deposits and shallow oil deposits. Petroteq is engaged in the development and implementation of its patented environmentally friendly heavy oil processing and extraction technologies. Petroteq is currently focused on developing its oil sands resources and expanding production capacity at its Asphalt Ridge soil remediation and heavy oil extraction processing facility located near Vernal, Utah.

Petroteq believes that its technology can produce a relatively sweet heavy crude oil from deposits of oil sands without requiring the use of water and therefore without generating waste water which would otherwise require the use of other treatment or disposal facilities which could be harmful to the environment. Petroteq's process is intended to be a more environmentally friendly remediation technology that leaves clean residual sand that is free of hydrocarbons and can be returned to the environment without additional remediation.

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