In a move that marks the Company's entry into the enormous Alberta Oil Sands market, Abakan Inc. ("Abakan") today announced that, along with the lead project partner, Northern Alberta Institute of Technology (NAIT), Abakan's 72% owned subsidiary, MesoCoat, has received a $2.75 million funding commitment from Alberta's Ministry of Innovation and Advanced Education (IAE) and Western Economic Diversification Canada (WD) for an 18-month collaborative effort to establish a prototype demonstration facility for developing, testing and commercializing wear-resistant clad pipe and components.
Improvements in wear resistance are expected to make a significant impact in reducing losses due to maintenance and downtime while increasing productivity in oil sands and other mining applications.
The Alberta oil sands have proven reserves estimated at more than 169 billion barrels, making it one of the world's largest oil resources. Much of the oil is extracted by mining and the use of hydro-transport pipelines to carry the oil laden bitumen from the mining site to the up-graders and refiners, and subsequently to return the waste sand and rock back to the mining sites to fill in the pits that were mined. The cost of maintenance of these hydro-transport pipelines and the associated downtime in Alberta is estimated at more than $10 billion annually. According to the Materials and Reliability in Oil Sands (MARIOS) consortium in Alberta, this figure is expected to increase significantly as production expands in the coming years. Alberta's Energy Resources Conservation Board expects output from the province's oil sands to double to 3.8 million barrels per day (bpd) by 2022, from the 1.9 million bpd in 2012. Therefore, this project is an important initiative aimed a reducing these enormous losses associated with that downtime.
"Our objective in Alberta is to fast-track the commercialization of our CermaClad™ long-life, wear-resistant clad pipes and components," said Abakan CEO, Mr. Robert Miller. "Once our products are adopted in Alberta, we anticipate acceptance for mining applications around the globe. Currently, pipes have to be rotated every three to four months and are replaced every 12 to 15 months. We intend to increase the life of these pipes and components using a combination of our advanced materials and high-speed large-area coating technology."
"The oil majors that mine the oil sands in Alberta have primarily been using the same two coating materials for the past forty years, tungsten-carbide and chrome-carbide, to protect their hydro-transport pipe," continued Mr. Miller. "Our wear-resistant clad products have shown two to four times improvement in wear and corrosion resistance in laboratory tests, compared to weld overlays currently in use, at costs that are lower than currently available alternatives."
"Producers are looking to extend the life of carbon steel transport pipes with harder, tougher coatings that protect them from the abrasiveness and high acidity of the tar-like bituminous oil sands. CermaClad wear-resistant clad products that will be developed through this collaborative effort with NAIT can provide that economically viable, long-term solution," concluded Mr. Miller.
About the Northern Alberta Institute of Technology
The Northern Alberta Institute of Technology is a leading Canadian polytechnic, delivering education in science, technology and the environment; business; health and trades. With more than 60,000 credit and non-credit students and a 98 per cent employer satisfaction rate, NAIT grads are essential to Alberta's prosperity. Known for hands-on, technology-based learning, NAIT engages with business and industry in applied research and innovation and provides corporate training around the world. Recognized as one of Alberta's top employers, NAIT provides outstanding returns on investment for its graduates, partners, the provincial government and the people of Alberta.