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Replies to post #43743 on QS Energy Inc (QSEP)
In February 2016, the modified AOT equipment was installed at Kinder Morgan’s facility. Pre-acceptance testing was performed in April 2016, culminating in more than 24 hours of continuous operations. In-field viscosity measurements and pipeline data collected during this test indicated the AOT equipment operated as expected, resulting in viscosity reductions equivalent to those measured under laboratory conditions. Supervisory Control And Data Acquisition (“SCADA”) pipeline operating data collected by Kinder Morgan during this test indicated a pipeline pressure drop reduction consistent with expectations. Kinder Morgan provided the Company with a number of additional crude oil samples which were tested in the laboratory for future test correlation and operational planning purposes. Based on final analysis of in-field test results, SCADA operating data and subsequent analysis of crude oil samples at Temple University, Kinder Morgan and QS Energy are considering moving the AOT test facility to a different, higher-volume pipeline location.
The Company is in discussions with a large Middle Eastern oil company regarding AOT technology in the Middle East, having tested multiple oil samples provided by this oil company at Temple University in 2015 and 2016. In 2017, the Company tested multiple oil samples provided by the Middle Eastern oil company, the most recent of which was completed in October 2017. These tests demonstrated AOT viscosity reductions on the subject samples of 20% to 50% in a laboratory setting.
In the fourth quarter 2016, the Company entered a contract to provide onsite testing services to a Canadian oil producer and pipeline operator at a fixed price of $50,000. The testing service was performed in January 2017 and was completed in March 2017.
During the third quarter 2016, the Company developed a new onsite testing program designed to accelerate the AOT sales cycle. This program utilizes a fully functional laboratory-scale AOT device designed and developed by the Company in 2015, and tested at the Southern Research Institute. Under this new program, Company engineers will set up a temporary lab at the customer’s site to test a full range of crude oils. Fees charged for providing this service will be dependent on scope of services, crude oil sample to be tested, and onsite time requirements. This program has received a positive response from potential customers. In the fourth quarter 2016, the Company entered a contract to provide these onsite testing services to a Canadian oil producer and pipeline operator over a one-week period in early 2017 at a fixed price of $50,000. This initial test was performed in January 2017; data analysis and final report was completed in March 2017.
In July 2017, the Company filed for trademark protection for the word “eDiluent” in advance of rolling out a new marketing and revenue strategy based on the concept of using AOT to reduce pipeline dependence upon diluent to reduce viscosity of crude oils. A primary function of AOT is to reduce viscosity by means of its solid-state electronics technology; in essence providing an electronic form of diluent, or “eDiluent”. The Company plans to market and sell a value-added service under the name eDiluent, designed to be upsold by the Company’s midstream pipeline customers in an effort to provide the Company with long-term recurring revenues.
During the third quarter 2017, the Company built a dedicated laboratory space at its Tomball Texas facility, and now has the capability to perform onsite testing utilizing our laboratory-scale AOT device, among other equipment. We restarted AOT Upstream development in September 2017, and plans to resume Joule Heat development in the future depending on the availability of sufficient capital and other resources. Also during the third quarter 2017, the Company built an outdoor facility at its Tomball Texas facility for onsite storage of AOT inventory and other large equipment.
We are in discussions with several oil companies regarding installation of a demonstration AOT unit. The Company recently received an oil sample from U.S. midstream oil company, and is preparing to test this oil sample at Temple University during the fourth quarter 2017. The Company is in active discussions with a number of prospective customers in the South American market operating in areas highly reliant on naphtha, on a very expensive crude oil product, as diluent to achieve required viscosity reduction.
Southern Research Institute (SRI) was engaged by QS Energy in 2015 to investigate the root cause of the crude oil condensate impedance issue by replicating conditions experienced in the field utilizing a laboratory-scaled version of the AOT and crude oil condensate samples provided by Kinder Morgan. In addition, QS Energy retained an industry expert petroleum pipeline engineer to review the AOT design and suggest design modifications to resolve the crude oil condensate impedance issue. This engineer has studied design details, staff reports and forensic photographs of each relevant AOT installation and test. Based on these investigations, specific modifications were proposed to resolve the impedance issue, and improve the overall efficiency of the AOT device, resulting in a new value-engineered design of certain AOT internal components.
QS Energy, Inc. (“QS Energy” or “Company” or “we” or “us” or “our”) develops and commercializes energy efficiency technologies that assist in meeting increasing global energy demands, improving the economics of oil extraction and transport, and reducing greenhouse gas emissions. The Company's intellectual properties include a portfolio of domestic and international patents and patents pending, a substantial portion of which have been developed in conjunction with and exclusively licensed from Temple University of Philadelphia, PA (“Temple”). QS Energy's primary technology is called Applied Oil Technology™ (AOT), a commercial-grade crude oil pipeline transportation flow-assurance product. Engineered specifically to reduce pipeline pressure loss, increase pipeline flow rate and capacity, and reduce shippers’ reliance on diluents and drag reducing agents to meet pipeline maximum viscosity requirements, AOT is a 100% solid-state system that reduces crude oil viscosity by applying a high intensity electrical field to crude oil feedstock while in transit. AOT technology delivers reductions in crude oil viscosity and pipeline pressure loss as demonstrated in independent third-party tests performed by the U.S. Department of Energy, the PetroChina Pipeline R&D Center, and ATS RheoSystems, a division of CANNON™, at full-scale test facilities in the U.S. and China, and under commercial operating conditions on one of North America’s largest high-volume crude oil pipelines. Recent testing on a commercial crude oil condensate pipeline demonstrated high correlation between laboratory analysis and full-scale AOT operations under commercial operating conditions with onsite measurements and data collected by the pipeline operator on its supervisory control and data acquisition (“SCADA”) system. The AOT product has transitioned from laboratory testing and ongoing research and development to initial production and continued testing in advance of our goal of seeking acceptance and adoption by the midstream pipeline marketplace. We continue to devote the bulk of our efforts to the promotion, design, testing and the commercial manufacturing and operations of our crude oil pipeline products in the upstream and midstream energy sector. We anticipate that these efforts will continue during 2017 and 2018.
Between 2011 and 2012, the Company transitioned from prototype testing of its AOT technology at the U.S. Department of Energy Rocky Mountain Oilfield Testing Center, Midwest, Wyoming (“RMOTC”), to the design and production of full-scale commercial prototype units. The Company worked in a collaborative engineering environment with multiple energy industry companies to refine the AOT Midstream commercial design to comply with the stringent standards and qualification processes as dictated by independent engineering audit groups and North American industry regulatory bodies. In May 2013, the Company’s first commercial prototype unit known as AOT Midstream, was completed.
In 2014, the Company began development of a new suite of products based around the new electrical heat system which reduces oil viscosity through a process known as joule heat (“Joule Heat”). The Company is designing and optimizing the Joule Heat technology for the upstream oil transportation market. The Company filed two provisional patents related to the technology’s method and apparatus in the second quarter and fourth quarter of 2013, respectively. The first of the two provisional patents was finalized and submitted to non-provisional status on April 29, 2014. The second of the two provisional patents was finalized and submitted to non-provisional status at the end of the third quarter 2014.
Abstract
The aim of the present work is to reduce the viscosity of Iraqi heavy crude oil to enhance its flowability in pipelines. This has been done by applying an effective electrical field through design and implementation of an invented capacitor. In order to attain this objective; an experimental rig has been built. It consisted of: a crude oil pipe, a novel parallel plate capacitor, an oil pump, a solenoid valve, a viscometer, and a control unit (relay, voltage regulator, rectifier, timer, and digital voltmeter). The experimental work was performed according to central composite rotatable design for three operating variables: treatment time (0–60 s), applied voltage (140–220 v), and space between capacitor electrodes of (2–10 cm). The optimum conditions were obtained using STATISTICA and WinQSB softwares. At optimum conditions, locally prepared nanosilica has been employed with different concentrations (0–700 mg/L) to show its effect on crude oil viscosity in the presence of an electrical field impact. The results showed that the viscosity was reduced significantly with increasing treatment time, voltage, and distance between electrodes. The Minimum viscosity obtained was at 32 s treatment time, 188 V, and 6.11 cm distance between capacitor electrodes. This represented the optimum conditions with a minimum viscosity of 20.479 cSt. Afterwards, the viscosity increased due to particles aggregation. At optimum conditions the fluid flow characteristics obtained were: 2630.93, 0.4089 gm/cm2, 0.2657 gm/cm2, and 57.059 W S, for Reynolds number, shear stress, pressure drop, and power consumption, respectively. The experimental results proved that the invented capacitor offered a good reduction in viscosity and a good saving in power of 37% at optimum con- ditions achieved at 10 ± 2 C. The nanosilica optimum concentration was 100 mg/L that gave a minimum vis- cosity of 12.8 cSt with a reduction percentage and power saving of 60.6%. The viscosity reduction has lasted for 11 h.
Conclusions
From the obtained results it can be concluded that the electric field proved to be a very effective method for viscosity reduction suitable for Iraqi heavy crude oil. The electric field processing technology consumes very little energy resulting in a high energy saving for pumping; also the flow rate of crude oil in pipelines subjected to electrical field treatment is greater than that without treatment. The experimental measurement of viscosity processed with electrical field method at low temperatures confirmed the effectiveness of the treating method even with lower climate temperatures. The innovative design of the perforated parallel plate's capacitor achieved a best reduction in the viscosity of Iraqi crude oil. It enabled the micro and nano size particles to arrange in short chains and allowed the layers of liquid to slide over each other in a regular form, diminished the turbulence and friction with internal pipe walls. The addition of nano silica particles in very low concentrations together with the electric field contributed significantly to crude oil viscosity reduction because of high dielectric, but at greater concentrations increased the viscosity. Thus it can be concluded that the nano silica treated viscosity, when added in a few percentages. Finally, electric field with a novel capacitor design can reduce the viscosity of heavy crude oil in few sec- onds lasting for several hours.
Acknowledgments
The authors would like to express grateful thanks to The Iraqi Min- istry of Oil/Oil Pipelines Company for the financial support in accor- dance with graduate research (grant No. 2/2016).
While our efforts are tightly focused on executing our pilot program strategy, conversations continue with prospective customers in the Gulf Coast, Canada, and the Middle East.
