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Genoil presents 'compelling economics' for LSFO production unit

17 May 2017 07:23 GMT

Engineering firm says a $30m investment could achieve payback in less than three months.



Genoil Inc, the publicly traded clean technology engineering company for the petroleum industry, has presented what it describes as "compelling economics" for the Genoil Hydroconversion Upgrader (GHU), for installations where there is existing infrastructure.

According to Genoil, the unit - built to produce one million tonnes per year of 2020-compliant low-sulphur fuel oil (LSFO) - can provide a rapid return on investment (ROI) with current market spreads.

The GHU unit costs between $30 million and $80 million to install per one million tonnes per year of capacity. Based on Genoil's predicted crude prices, said to have been reviewed by independent bodies, an initial investment of $30 million could achieve payback in less than three months, according to the Canada-headquartered company.

At current levels, based on a spread between heavy fuel oil (HFO) and distillates of $179.78, and inclusive of Genoil's process fee, the firm says margins per metric tonne (mt) would be $123.78 - equating to monthly profits of $11,701,789 based on a production capability of 94,537 mt per month.

The GHU is designed to remove sulphur from heavy fuel oil (HFO) without altering the fuel quality, to produce LSFO that is compliant with new MARPOL Annex VI regulations.

Measuring as little as 50m x 80m, the GHU takes up significantly less space than a full refinery unit. It can be built alongside existing refinery infrastructure in major bunkering hubs - rather than incurring the costs to develop and build new infrastructure - and can be placed in different locations, including receiving terminals, pipeline facilities and ports.

"The GHU is the low-cost breakthrough that the industry needs today. Shipping continues to face significant financial and liquidity challenges, which is why Genoil has developed a lower cost GHU solution for the industry, one that provides almost immediate payback," said Bruce Abbott, President & COO of Genoil Inc.

"We have received a high level of interest throughout the industry from many large players who realise that the 2020 deadline is looming, and that they need to develop a cost-effective strategy. The GHU is not only the lowest cost solution available, but is also a proven process that provides compliant bunker fuel without having to alter or retrofit existing vessels, and provides a faster payback."

Through its partner, Beijing Petrochemical Engineering Company (BPEC), Genoil says it has access to the finance and engineering capabilities necessary to fund and build the GHU.

Image: Genoil GHU design test plant.




Related Links:

Genoil appoints Middle East VP
Genoil and Bomin sign MoU to develop 2020-compliant fuels
Genoil signs $50bn letter of intent to produce 3.5m barrels of desulphurized fuels a day
Genoil secures $5bn funding for desulphurization project
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