Gen III Oil Corp. signed a 20-year lease for a Western Canada site where it intends to build an API Group II and III rerefinery.
The Bowden, Alberta, rerefinery is expected to process 2,800 barrels per day of used motor oil into a range of base stocks and related petroleum products using a patented ReGen rerefning technology process. Gen III President George Davidson said in a phone interview that the rerefinery is projected to produce about 1,400 b/d of API Group III and 700 b/d of Group II base oil. He added that it will also produce ultra-low-sulfur diesel and some asphalt flux. In terms of feedstock, he said Gen IIIs plan is to work with local used oil collectors in Western Canada.
Vancouver, British Columbia-based Gen III said in a news release that it intends to commence construction of the rerefinery in the summer of 2018, with commissioning and startup planned for 2019s first quarter. The companys management is seeking engineering, procurement and construction proposals for construction of the rerefinery.
In September, Gen III announced signing of a purchase and sale agreement - over an initial five-year term - with Calgary-based Elbow River Marketing Ltd. for the majority of the finished products from the Bowden rerefinery. Under the agreement, Elbow River will purchase products from the plant and provide rail and truck transportation to Elbow Rivers customers. So weve locked up our offtake with Elbow River, and its theirs to distribute to blenders as they see fit, Davidson said.
He described Bowden as mid-way between Edmonton to the north and Calgary to the south, in the middle of Alberta province. Davidson said the site leased from Parkland Refining offered a number of advantages. Theres a lot of existing infrastructure in place in terms of rail, truck, tankage, settlement bonds, all the utilities - its a very favorable site for us, he said. Parkland will provide storage tankage and terminal services to Gen III on a fee for services basis.
The ReGen process was previously owned by a Canadian company called Verolube Inc., which in late November 2013 announced plans to build build API Group II and III rerefineries in Alberta and in Houston, with construction expected as early as late 2014. These were to use a rerefining process called ReGen, which VeroLube claimed had been created, tested, certified and patented from 2003 to 2013. The company had claimed the process could recover about 75 percent of used oil input capacity as rerefined base oil.
VeroLubes rerefinery projects didnt come to fruition. Davidson confirmed that Gen III acquired and now owns the ReGen rerefining technology.
Stephen B. Ames of SBA Consulting, Pepper Pike, Ohio, noted that although VeroLube went bust in 2014, a company called PNG Gold made private placements in VeroLube, securing them with VeroLubes assets, which were primarily the ReGen rerefining technology. PNG Gold later changed its name to Gen III Oil Corp. in May 2017. Gen III also appears to be following up on VeroLubes plans with a 2,800 b/d used oil processing capacity rerefinery at a leased site in Bowden, Alberta, Ames said.
Gen III claims the ReGen process will yield 75 percent base oil from the used oil feed, which is higher than all other well established technologies, Ames told Lube Report. They also say the base oils will be roughly [50-50] Group II and Group III quality. Those are tall claims.
He pointed out that rerefined yields and quality are largely a function of the used oil feed. For Group III it surely must be all from low-viscosity passenger car motor oil and heavy-duty engine oil drains. But where is that much used oil coming from?
Ames noted that 2,800 barrels per day is a lot of used oil to collect from the sparsely populated provinces of Western Canada. They will have to go far and wide to accumulate the necessary supplies/quality, he said. Those longer logistics are at a cost.
The nine-month construction timetable also appears to be highly ambitious, he said. They have not yet selected an EPC. I would be surprised if construction were completed by the end of 2019.