SONIC Technology Solutions Inc. has entered into a joint venture agreement with Mirex Energy Inc. to construct and operate the first PetroSonic heavy oil upgrader in Canada. Mirex is an oil production and services company operating in the Lloydminster region and will be the operating partner in the JV. The project will initially be designed for a 1,000 barrels per day (bpd) facility to be located on the Elizabeth Metis Settlement in Alberta. The PetroSonic facility will be designed to upgrade local heavy oil supplies to meet the minimum API requirements for Canadian pipelines.

Mirex will provide facilities for the installation and initially manage the operating contracts. SONIC will grant a license for its proprietary PetroSonic upgrader technology and manage the installation and start-up. Mirex and SONIC will be equal partners exclusive of any interest in the project by the financing partners. Capital financing for the project will be provided as debt and/or equity into the project.

This will be the first PetroSonic upgrader in Canada and will allow SONIC to fully implement the process in a modular plant design which allows the process to be run in various configurations to allow for process optimization and data. The PetroSonic upgrader is a low temperature and pressure process utilizing a SONIC reactor for de-asphalting and an oxidation process to further upgrade the oil. The economics of the project improve as the price differentials between heavy oil and pipeline specification - predominantly viscosity and density driven. Successful operation of the first installation would anticipate expansion to 3,000 bpd on a self-financed basis.

The license granted to the JV is exclusive for all Metis settlements in Canada and allows Mirex and SONIC to expand the operations of the JV to other locations or to enter into new agreements for each location. Heavy oil will be supplied in part by related parties and supplemented by independent local production. Upgraded oil will be sold into the pipeline system.

Archie Collins, Chairperson for the Elizabeth Metis Settlement, commented "We have a very successful partnership with Mirex and this project offers local oil producers, Metis and others alike, the opportunity to build our local oil processing facilities. We have plans for related oil services which may integrate very well with the upgrading facility."

Tags: SONIC Technology Solutions Inc.