STWA continues expanding their portfolio of proprietary applied oil and fuel delivery solutions (developed with and exclusively licensed from Temple University) for the multi-billion dollar oil pipeline and diesel engine markets, reporting today that China's biggest oil producer PetroChina and the China Petroleum Pipeline Administration's (CPP) lab testing of the company's Applied Oil Technology™ (AOT) has generated successful results, leading to approval for Phase II Field Loop Testing.
Testing was specifically focused on three of China's most widely produced/consumed oil grades (Daqing, Changqing, and Venezuela crude oil) in order to examine the viscosity reduction capabilities of STWA's AOT technology across all major metrics. The AOT technology could save China's booming oil industry huge sums of money by improving oil transportation costs, good news for the fastest growing oil consuming nation on earth, and good news for STWA, who stands poised to reap the rich rewards of this influential relationship.
After Phase II, progression to a Phase III commercial pilot program should be swift, as these three phases represent the basic regulatory hurdle faced by all emerging domestic/imported pipeline technologies and tend to speed up as each barrier is cleared. Beijing Heng He Xing Ye Technology, STWA's commercialization partner for China (who is responsible for the full costs of implementing testing and obtaining certification, as per the March 15, Cooperation Framework Agreement), has indicated that the projections for Phase III would see the AOT technology implemented on a 186-mile, 27" pipeline going up in Shandong Province. CPP/CNPC has already cleared the way forward with Phase II authorization to begin the field testing at CNPC's Pipeline Flow Assurance Test Center and have published their report on the extant testing done at the Pipeline R&D Center.
According to CNPC, China's largest oil and natural gas producer, the Daqing oil region is one of the most prolific on earth, with the Changqing Oilfield pumping out a whopping 20M tons of crude in 2011 alone (one-fifth of CNPC's total output and one tenth of China's annual output). Combined with skyrocketing Venezuelan imports (125.9k bbl/day in 2010, more than tripling in the five years since 2005 according to a U.S. Energy Information Administration report), this presents a very unique oil transportation situation for China to manage and the testing thus far has largely been aimed at presenting a major solution to the situation.
CEO of STWA, Cecil Bond Kyte, underscored deliberate testing of the three main oils used in China as providing a huge, approachable means of helping to achieve the 16% energy intensity reduction goal set by the Chinese government for 2015. Exactly the kind of energy efficiency solution the company was formed to help create and a real testament to the scalability of the AOT technology, which could see much wider ranging application after this major implementation.
Not hard to imagine many, many other companies beating a path to STWA's door after this and even a cursory look at some direct quotes from the report is enough to convince one of such. Direct statements that the AOT viscosity reduction technology has the ability to significantly curb viscosity on all three major oils (Daqing, Changqing, and Venezuela crude oil, with the particularly effective results from testing Daqing/Changqing oil noted explicitly), go a long way to ensuring other clients of the technology's efficacy and have certainly piqued the interest of sector investors.
Statements to the effect that testing showed 80% viscosity reduction (at 35-40ºC) for Daqing crude and over 78% (at 26ºC) on Changqing crude, validated as lasting more than 24 hours, gives the larger oil industry a very clear picture of the potential of this technology, which, according to the report, "reduces the viscosity very fast, in a couple of seconds, and consumes little energy." The report called the AOT technology, based on testing results, a "breakthrough in crude oil viscosity reduction," and cited the broad international appeal in both paraffin and asphalt based crude oils.
The report indicates that CPP and U.S. experts will continue to work hand-in-hand towards tailoring the perfect solution for China's burgeoning oil industry and points to the AOT technology as being a real potential game-changer for China's high-risk crude oil transportation industry.
For more information on the testing results, the CPP/CNPC PetroChina R&D Center Report, or to learn more about STWA, Inc., please visit the company's website at: www.STWA.com
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