GENOIL INC. AND HEBEI ZHONGIE PETRO-CHEMICAL GROUP SIGN A MEMORANDUM OF UNDERSTANDING TO JOINTLY BUILD THE FIRST MAJOR HEAVY OIL HYDROCONVERSION UPGRADER IN CHINA
February 28, 2006
TSXV SYMBOL: GNO
OTCBB SYMBOL: GNOLF
Edmonton, Alberta & Nanpaihe Town, Huanghua City, Hebei, China. Genoil Inc. has entered into a non-binding Memorandum of Understanding (the “MOU”) with Hebei Zhongie Petro-Chemical Group to jointly develop and build the first major commercial heavy oil upgrader in China, with a capacity of 30,000 barrel per day based on the Genoil GHU technology. The first step in the implementation of this MOU is to conduct an engineering and feasibility study to install a Genoil Hydroconversion Unit (“GHU”) based on a M380 feed at Nanpaihe Town, Huanghua City, Hebei, China.
Representatives from the Hebei Zhongie Petro-Chemical Group plant are expected to be coming to Edmonton, Alberta, within the next three months to visit the GHU pilot facility in Two Hills, Alberta, and kick off the first phase engineering and feasibility study. The engineering and feasibility study will start immediately with the analysis of the raw M380 crude that is to be upgraded using the Genoil GHU upgrading technology. Testing of the M380 crude is required to establish the parameters for the construction of the GHU upgrading unit at the most optimal upgraded crude quality and API.
James Runyan, on behalf of Genoil, stated, “This transaction shows Genoil is executing on plan to partner with various global refinery owners allowing them to realize greater profitability for their own reserves or imported crude supplies. China has pulled out all the stops in searching for ways to find new crude oil supplies either through finding new oil or making better use of the oil that it presently processes. By utilizing the GHU upgrading technology, we believe China can limit the waste of oil which results from a rejection of carbon and instead can use the rejected carbon in the Genoil GHU process by combining it with hydrogen to avoid what would otherwise result in wasted oil. It is estimated that China requires an additional 17 million tons of crude to meet current demand and we see this demand as both causing imports to soar and placing a strain on the entire international oil complex. Demand in China is expected to grow at a rate of 6% per year, and more oil, more refineries and new technologies such as the Genoil GHU will be required to meet that demand and the constrained oil production around the globe. Equally as important, Genoil’s technology is designed to remove from 90 to 99 percent of the sulfur and most of the nitrogen from crude, thereby reducing the sources of greenhouse gasses that pollute the environment. We believe Genoil’s technology, being a green technology, is well suited for use in China as China has placed a priority on addressing these environmental concerns for the wellbeing of its people. China is a very large and growing market which Genoil is working actively to penetrate with the Genoil GHU technology. Genoil is regularly engaged in communication with other companies, including other oil companies in China, some of which are extremely large, to review the Genoil GHU technology to meet their future refining needs. Some of these companies have shown great interest in Genoil’s GHU upgrader and the Genoil GHU technology is presently being reviewed by them to alleviate the pressure on China from its increasing oil demand.”
Genoil is a technology development company providing solutions to the oil and gas industry through the use of proprietary technologies. The Genoil Hydroconversion Upgrader is designed to economically convert heavy crude oil into more valuable light synthetic crude, high in yields of transport fuels, while significantly reducing the sulfur, nitrogen and other contaminants in the oil.
Genoil’s shares are listed on the TSX Venture Exchange under the symbol GNO, as well as on the OTC Bulletin Board under GNOLF.OB.
For more information on Genoil Inc. visit www.genoil.net
James F. Runyan
Phone: (780) 416-5590 Ext. 236
Fax: (780) 416-1008
Statements included in this release may constitute forward-looking statements. Such statements involve a number of risks and uncertainties such as competitive factors, technological development and performance, market demand, and the company’s ability to obtain new contracts. Further information on potential risk factors that could affect the company’s financial results can be found in the company’s Reports filed with the applicable securities regulators.
ADVISORY: The TSX Venture Exchange has neither approved nor disapproved of the information contained herein. Certain information regarding the company, including management’s assessment of future plans and operations, may constitute forward-looking statements under applicable securities law and necessarily involve risks associated with oil and gas related technologies, production, marketing and transportation; as a consequence, actual results and outcomes may differ materially from those anticipated. The company assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those contemplated by the forward-looking statements.