News From Management D & A
Albanian PetroSonic Joint Venture
The joint venture continued to purchase and receive equipment through the third quarter with the concrete base completed, the building to house the Sonic reactor delivered, installed and optimized, and tanks and vessels completed and delivered to site. In addition, equipment such as the de-asphalted oil heater, separation vessel, and exchangers were all delivered to site.
Delays have occurred in tying in power to the site and subsequently, with getting the Sonic
reactor into optimized resonance with the different electrical configuration suitable for local conditions. Both of these issues have been resolved and the Sonic generator is now in operation although local city power upgrades and related outages continue to create an operational challenge.
The Sonic unit has been testing local heavy crude oil from our joint venture partners with the estimated minimum expected 6 degree API increase in the de-asphalted oil and samples being sent for further analysis. The joint venture is expected to review these results with several potential off-takers for the de-asphalted oil. Once this has been satisfactorily concluded, the joint venture will look to complete the installation of the facility with appropriate power solutions for
continuous operations.
The joint venture partner has continued to support local costs with the construction of the facility, however, it has not completed its commitment in paying for additional sourced equipment from abroad towards its $1million commitment. The Company has incurred approximately $255,780, which it would expect to receive from the joint venture partner as the project proceeds subsequent to final results and off-takers being confirmed. It is expected that an additional $400,000 of capital expenditures is required to complete the project with the majority of this cost being the
naptha condenser and oil cooler. Timing for such completion, subject to favorable analysis and off-take interest, is now expected in early 2011. The Company will rely on the joint venture
partner to cover these costs and complete its commitment.
SonoAsh Joint Venture
The Company achieved what it believes to be unparalleled results from its batch and continuous flow through processing of non-recycled bituminous coal combustion fly ash. A first set of international patent applications are currently being prepared for filing in countries having large volumes of non-recycled coal combustion fly ash, including China, India, United States, Australia, Japan, South Korea, Indonesia and European countries. The first of a second set of international patent applications is being prepared for filing now.
The Company believes that its results are a significant step in moving this technology application through the test phase into commercial piloting. The Company will be reviewing the results with Nalco Mobotec, before year end, to determine the next steps which may include partnering with a power plant operator for a pilot facility as the next phase of development.
