Headwaters Incorporated announces commercial scale test of its proprietary (HC3)TM heavy oil hydrocracking technology

09-Nov-2005

Headwaters Incorporated announced that it has begun a commercial-scale demonstration of its proprietary (HC)3 (TM) Heavy Oil Hydrocracking Technology ("(HC)3 Technology") at a large commercial refinery. The (HC)3 Technology uses a unique liquid catalyst, chemically generated within the process plant, to change residual oil feedstocks into higher-value distillates which can be further refined into gasoline, diesel and other fuel products. This test will take approximately one month to complete, after which Headwaters expects to announce more technically detailed results. At this early point, the test is proceeding as expected and will be carefully monitored throughout the test period.

The refinery for this initial full-scale test was selected because the (HC)3 Technology is relatively easy to integrate with the refinery's existing hydrocracking reactor system. (HC)3 Technology utilizes a specially designed catalyst addition and conditioning system to function with the existing ebullated bed reactor.

Headwaters believes that the (HC)3 Technology represents a breakthrough in heavy oil upgrading. Older processes for upgrading so-called "bottom of the barrel" residuals have been in commercial use for almost a century. The earliest of these relied on "thermal cracking" - breaking down large molecules into smaller ones at high temperatures - while later technologies utilized solid catalysts and hydrogen addition to improve the quality of the main products and to minimize the production of unwanted byproducts. Solid catalysts, though, are limited by their physical structure in terms of the maximum amount of residuum that can be converted and to the quality of the products. Before the introduction of Headwaters' (HC)3 Technology and its unique liquid-phase catalyst, conventional (solid) catalytic hydrocracking was the state-of-the-art in heavy oil upgrading. Now, by utilizing this new liquid-phase catalyst technology, we believe refiners can produce more distillates of better quality than anything previously possible.

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