McLennan News Progressing Towards Area's First 25000 bpd Upgrader Artical from Peace River Oil website. Since announcing plans in December 2005, Peace River Oil Inc. has made substantial progress towards their plans to construct a 25 000 barrel per day heavy oil upgrader. To be located near the Town of McLennan the plant will serve the area's heavy oil production. In a recent interview with Smoky River Oil News, Dr. Len Flint, technical director for Peace River Oil, described the upgrading of bitumen and heavy oil and how it will be processed with Peace River Oil's technology selection. Dr. Flint has more than 25 years of high level industry experience, and has a Bachelors, Masters, and Ph.D. in chemical engineering from London University. Most of Dr. Flint's career was with Shell Canada where he was instrumental in developing upgrading and refining technology that is being employed in Shell's joint venture in the Athabasca Oilsands Project- Muskeg River Mine and Fort Saskatchewan/ Scotford upgrader refineries. Dr. Flint's new role with Peace River Oil is interpreting the technical analysis of upgraded oil from the Peace Oilsands area and incorporating the data in technology selection and scale up of the Bluesky upgrader. Recently, heavy oil from the Peace Oilsands Area was sent to New Jersey, NY for a pilot run test employing a catalytic heavy oil hydrocracking technology. This technology will be used in Peace River Oil's Bluesky Upgrader facility. Heavy oil and bitumen are comprised of carbon chain molecules that have been degraded over time by geological processes that have eliminated hydrogen molecules, normally found in lighter oils. Heavy oils can be upgraded to a useable product through either hydrogen addition or the removal of carbon through a coking process. The feedstock coming into an upgrader is comprised of heavy oil blended with diluent. At the upgrader the diluent is recovered for reuse, impurities in the crude oil such as water, salt and sand are removed. Lighter ends are separated and refined into useable fuel products. The heavier residual oil from the feedstock is sent to the upgrading plant for hydrocracking treatment. Within the hydrocracker reactor the heavy oil is reacted in a high temperature, high pressure hydrogen environment and is cracked in the presence of a catalyst into lighter components. The hydocracking technology selected for the Peace River Oil facility is called (HC)3 ™ a catalytic heavy oil hydrocracking process. The (HC)3 technology was developed at the Alberta Research Council and tested at a small pilot plant scale. In 2001, Headwaters, a hydrocarbon technology company based in the U.S., obtained exclusive rights to commercialize and license the technology. Roger Lott co-inventor of this technology explains the advantages over current upgrading technologies. "(HC)3 technology uses molecular catalyst to upgrade heavy oil over a wide range of conversion whereas current catalytic processes cannot upgrade the heavy oil from Alberta beyond 60% conversion without problems or additional feedstock treatment. The technology can be easily integrated in current commercial upgraders to improve their operation efficiency." Peace River Oil plans to add additional refining capabilities to create higher value added products such as diesel fuels and gasoline's. This has increased the value of the project from an initial $800 million to $1.4 billion. Additional phased expansion correlated with increased heavy oil and bitumen production from the Peace Oilsands Area will eventually bring capacity of the facility to 100 000 bpd. For more information on P.R.O. please visit their website at www.peaceriveroil.com Email:   twnmcl@serbernet.com