SOURCE: AXcess News

June 06, 2007 11:00 ET

AXcess News: New Oil Pipeline to Supply US Refineries

HOUSTON, TX--(Marketwire - June 6, 2007) - (OTCBB: PTCH) -- A new oil pipeline being planned by Enbridge and ExxonMobil to carry 400,000 barrels of oil per day to Gulf Coast refineries marks the second major project in a year to fill growing US demand thanks to Canada's Alberta oil sands supplies.

The pipeline marks the first major US oil company to venture into transporting oil from the vast Alberta oil sands reserves thanks to ExxonMobil's existing right of way, which stretches from Cushing, Oklahoma to Nederland, Texas. Enbridge owns the rights of way from Cushing to Patoka, Illinois. The two companies plan on transporting 400,000 barrels of oil per day to refineries in Texas and say the pipeline will be online by 2010, just one year after TransCanada's 400,000 barrel per day oil line will be pumping Canadian oil to Midwest refineries.

US demand in May grew by 2.4 percent, the Energy Department said last week which shows consumer appetites for energy remain high. Part of the supply strain has come from OPEC cutting back on production levels, which the group's secretary-general said Tuesday there wasn't enough evidence to support an increase in production. But even if it did, the US has already pushed Canada to expand oil exports from 1 million barrels per day to as much as five times that amount.

While the rush is on to fill demand, many oil companies within the oil sands arena are still working to prove up reserves before pursuing funding for production plants or more discovery work. Newer technologies now make it feasible to mine the oil-rich sands in the Alberta province but only a handful of companies, outside of the major companies, are far enough along to develop them.

Following a $20 million financing, Patch International, Inc. (OTCBB: PTCH) began beefing its management with the appointment of a new CFO and COO. Now, investors are waiting on the results of drilling reports on two vast fields the company acquired late last year to assess reserves. Patch had indicated earlier that it intends on building a 25,000 barrel per day SAGD plant, which utilizes steam assisted gravity drainage to separate the oil from the sands. SAGD, while a new technology, is one of the proven methods being utilized in the Alberta oil sands.

Patch's SAGD plant is scheduled to go online in 2010, according to information on the Company's website. That coincides with the Enbridge/ExxonMobil pipeline being completed.

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