Oil Extraction & Upgrading Technology

Twin Hills Resources and Partners Economic and Environmental Solutions in the Oil Sands

he oil and gas industry is constantly evolving and looking for new ways of being more productive and cost-effective. Lowering the cost of bitumen production has always been important, however now it is becoming more critical. Time and time again we have seen, with the wealth of the Oil and Gas Industry and its ability to tap capital markets, that there is no lack of resources to tackle technological challenges. However, funding for project capital expenditures is under increasing pressure. Capital market leaders have warned Oilsands and Oil Industry executives that they must drive their costs down and compress the gap between Oilsands and conventional oil processing costs. This has come to be an imperative now that the cost of bitumen production and related projects may deem some of these previously sanctioned opportunities uneconomic or at least with a lower than forecast return on investment.

There is a general reluctance, or a lack of will to embark on a path with new technology unless the reliability and scalability, along with expert analysis, indicates a measured risk. Again, those same capital providers do not want surprises. As the industry advances with technology improvements, getting major oil companies to move toward novel approaches and moving out of proven processes is difficult. Financial markets punish those who try and fail. Innovation can be limited to those normally supported by government programs for Green House Gas (GHG) reduction, sustainable development support and patient capital investors seeking to back and fund the “Next Big Thing” or “Game Changer” that comes along.

Technology deployments throughout the E&P side of the Conventional Oil and Gas Market have led to significant production increases. We have seen unprecedented gains in the recent past. Between 2007 and 2011, there was a three times (3x) increase in the efficiency of North American gas wells because of technology. Technology that has brought us to new levels of oil production which is leading to further predictions that there will be a 200% increase in the production of oil in North America by 2025, from hydraulic fracturing, horizontal drilling and other increasing knowledge on stimulation and improvements in well maintenance. These production increases have led to the current shift in oil pricing. OPEC’s decision that they are not willing to cut back on production and the resulting price impacts on worldwide oil industry supply and demand pricing are unprecedented.

2000-2010 saw rapid price growth to realign perception of the true value of oil and its relative costs to the economy. The high price may have been an anomaly, not entirely supported by market fundamentals, although there seem to be no shortage of opinions on either side of the argument as to whether oil will climb back to its previous highs.

Focused on efficiency increases in production and greener solutions for the industry, Twin Hills Resources Inc., of Fort McMurray, Alberta, is working on bringing disruptive technologies to a market that will advance the industry in new and creative ways. Disruptive technologies have become critical, and sometimes arrive in an unplanned way. Once they are revealed and proven to provide a novel solution, we better understand that we cannot solve our current major challenges with the status quo. We need higher level thinking that will lead to solutions coming about in unprecedented ways.

Disruption takes smart creatives who harness technology and lead us to peak performance. In this case, Twin Hills has harnessed the creativity of physicists, geologists and seasoned oil industry veterans with technical savvy and groundbreaking technologies. Twin Hills has married this technical expertise with patient private capital, raised mostly from successful Alberta Oil Service Industry entrepreneurs. They hope to rewrite the book on current designs of mining extraction, SAGD plants, heavy oil processing and upgrading methodologies. Lofty goals, nonetheless, the founders of Twin Hills and their Multi-National Scientific team are up for the challenge. They are targeting projects one at a time, in bite size approaches to the technical prowess of their systems. They are buoyed by the fact that the team has already achieved results exceeding any currently published similar technology with lower energy consumption and the need to now move to independent tests which will stand the scrutiny of Corporate executives and institutional investors.

The group is fully aware that disruptive technology can evoke fear of change, lead to claims of unproven gains and also see current industry engineering teams telling proponents why something cannot be done. A key step in the process of Twin Hills and its partner’s assessment of the opportunity was to determine how to integrate their technology in the current oil processing systems that exists, using their planned integration testing as a proving ground. This is seen as then leading to the longer term financing necessary to develop and evolve the conceptual plan for A LOW ENERGY OILSANDS EXTRACTION & SYNTHETIC CRUDE OIL PRODUCTION SYSTEM.

Twin Hills in partnership with Envirotech Green Inc. has a team who have invented a solution for upgrading heavy oil, black wax and kerogen for the purpose of improving the quality and lowering the viscosity of Bitumen. These processes involve the use of sonic waves amplified in a sonic reactor chamber to create cavitation bubbles that then lead to partial upgrading of heavy bitumen to a lighter, more transportable oil thereby reducing the requirement for diluent. A second cavitation process actually developed first, extracts bitumen from raw oilsand, resulting in a lab tested recovery of 99.7% of the bitumen from oil sand and stacked separation of sand remnants, precipitated clay, clarified water and bitumen.

Twin Hills and its partners have developed cavitation oil technology that is innovative in a number of ways:

1. Removing extremely high yield of bitumen from oil sand – The extraction system pilot separates 99.7% of the bitumen from the sand allowing it to be floated off with current flotation technologies and then further processed into Synthetic Crude Oil (SCO).
2. The extraction system pilot unit generates water which clears readily, and uses no chemicals, reagents or other process leading to a potential for thus leaving an environmentally acceptable water byproduct from the process which could then be recycled back into the process or used for other purposes. Furthermore, the sand and clay fines from the process settle out quickly, a far cry from current systems in oil sands extraction wherein tailings liquid which have much of the fines and superfine clay particles remaining in suspension until significant time passes and/or a mechanical or other process is used to remove such particles from the mix and then dry them enough to reclaim the land for some useful purpose. Too much moisture bound to the clay leads to the mucky goo which will not build a solid base to reclaim the mined areas quickly. The Twin Hills solution seems to solve this; however, more industry acceptable testing will be required. Discussions have started with COSIA.
3. The partial upgrading electro-sonic cavitation application of the technology has, in current testing, reduced the need for diluent by a minimum of 55% per barrel, and increases the value of the resulting bitumen significantly on a price per barrel basis. In doing so, this technology may do much to bridge the gap between the current differential between Regular Crude oil and Dilbit (Diluted Bitumen). Dilbit can require from 20-40% diluent by volume to be shipped in a pipeline or tanker car. Analysis of the company’s current test data by highly published upgrading industry experts indicates a potential 20-30% cost advantage with the resulting improvements and cost avoidances for oilsands processing.

A recent article in Alberta Oil Magazine highlighted the need for The Holy Grail for the Oil Sands being partial upgrading technology that would reduce diluent use and optimize pipelines. Twin Hills Resources believes that their cavitation oil technology can be this answer for the oilsands and heavy oil industry.

The Twin Hills/Envirotech Green process of oil extraction involves four main stages:

Pre-Mix

This process of oil extraction involves combining the oil sands and water together in the systems pre-mix chamber. Slurry is exposed and bombarded with a turbulent high velocity water jet stream and low intensity cavitation. This 30 second pre-mix treatment outputs oil sands slurry that is then moved into a high energy cavitation chamber for extraction of its bitumen content. The process is fast and effective.

Extraction

The extraction process involves ultrasonic waves that impact the slurry as it circulates in the extraction chamber for approximately six minutes in its bitumen extraction cycle. Amplified by resonance in the chamber, the ultrasonic waves generate pulsating cavitation bubbles that attach to and then violently implode on the surfaces of the bitumen and sand particles. Temperatures inside the collapsing cavitation bubbles, under adiabatic compression are extreme and the high temperature impulses cause the cavitation of ore molecules to occur. The disintegration of the pulsating bubbles in the cavitation cause the separation of bitumen, water, sand and clay fractions from the oil sand. The process fractures from the sand, are as small as 5 microns which then frees up the bitumen. The reformed sand and clay particles seemingly become spherical and no longer have a lattice structure maintaining moisture in the same manner as currently impacts the ability to reclaim tailings.

Partial Upgrading

The Twin Hills partial upgrading process reduces the need for diluent and does not use solvents. A partial upgrading pilot plant has been developed with a capacity of 360 barrels per day for upgrading bitumen, heavy oil and Utah black wax. This technology, once deployed into a field test environment and proven, may also lead to optimization of the existing pipeline capacity within Alberta if it is widely adopted.

Extraction To Final Product

The ultimate results of the two processes is that 99.7% of the bitumen content is extracted from the sand using extremely low amounts of capital to build the systems and energy to run the devices. The water settles clear, avoiding the issues currently facing the mining side with tailings disposal challenges. With sand and clay sinking to the bottom becoming stackable remnants of the process would allow much faster reclamation, keeping the commitment of industry to environmental improvements.

Currently, Twin Hills Resources/Envirotech Green is completing independent validation tests of both the sonic cavitation extraction and electro-sonic cavitation partial upgrading / diluent avoidance technologies. Results will be available for selected major oil industry partners in Canada to develop future partnering and testing opportunities. Twin Hills will then move to the Field Testing of larger units leading towards commercialization and integration into existing mine processing and SAGD operations to further the necessary industrial proof. Twin Hills is looking forward to commercializing these technologies with their expected positive results in 2015 leading to steady expansion and second phase tests with the full design of a low energy oilsands extraction and synthetic crude oil production system expected for feed stage by 2020.

To find out more contact:

Byron Bailey, byron.bailey@twinhillsresources.com
Kevin Aylward, Kaylward@nwestenergy.com