San Leon Energy signs MoU with Chevron Lummus Global to produce oil in Morocco

ShaleChevron Lummus Global will do a detailed evaluation focused on implementing proven proprietary technology on the raw shale oil produced at the Timahdit Plant. (Image source: John Amos/Flickr)Ireland-based oil and gas exploration company San Leon Energy Plc has signed a memorandum of understanding (MoU) with Chevron Lummus Global LLC to provide upgrading technology for the Timahdit shale oil license

The technology is meant to produce high grade crude oil and raw shale oil will be produced in the company's Timahdit oil shale license area in Morocco.

According to the MoU, Chevron Lummus Global will do a detailed evaluation focused on implementing proven proprietary technology on the raw shale oil produced at the Timahdit Plant.

This technology will be designed and delivered in co-operation with Enefit Outotec Technology (EOT), a joint venture between Enefit and Outotec. Enefit is the world's leading oil shale energy company Enefit and Outotec is a minerals and metals processing technology company.

Chevron Lummus Global will propose a design for a shale oil upgrading unit to produce high quality synthetic crude oil which will then be refined locally. Chevron Lummus Global has already licensed its hydrocracking technology to the Samir refinery in Mohammedia, Morocco.

The Initial EOT study proposes that the Timahdit Plant will have three Enefit 280 units. The plant will be designed with the ability to increase capacity to exploit the estimated resource of 600mn barrels (bbl) of shale oil within San Leon's Timahdit license area. The project will also include power generation facilities.

San Leon Plc is currently conducting a core drilling operation to extract samples from the Timahdit shale oil deposit for testing at the Enefit Bench Scale plant located at EOT's R&D centre in Frankfurt, Germany. The results of these tests will be available in Q2 2014.

An updated feasibility study for the Timahdit Oil Shale project is currently planned to be completed by year-end. This will facilitate the completion of project finance to fund the construction of the proposed plant, which is expected to begin after 2015.

In August 2013, San Leon was offered exclusive rights to the 36-sq km Timahdit Oil Shale License for two years to evaluate the commercial viability of a surface retorting project on the Timahdit oil shale deposit. Timahdit's shale oil yield in the awarded area is considered to be the highest in Morocco and has significantly less moisture content than many other international oil shale deposits.

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