Gen III Oil Corporation, formerly PNG Gold Corp., has signed a Letter of Intent with Elbow River Marketing Ltd. for a five-year off-take marketing agreement for 100% of Gen III’s finished products from Gen III’s first lube oil re-refinery.
Elbow River is a wholly owned subsidiary of Parkland Fuel Corporation, a Canadian public corporation traded on the Toronto Stock Exchange. Elbow River acts as an intermediary in a variety of fuels markets across all of North America, bringing buyers and sellers together, as well as providing logistical services to facilitate delivery of a variety of energy products from the buyer to the seller.
“We are proud to enter into this agreement with Elbow River as their reputation, expertise and stature in the lubricant, marketing and distribution industry in North America assure ourselves and our shareholders the long-range security that our high-quality base oils will be marketed by a premier corporation that will see us realise maximum value for our products,” said Gen III CEO Greg Clarkes.
Gen III is developing its first full-scale facility on an existing refinery site to make use of infrastructure already in place located in Parkland Fuel’s Bowden, Alberta, Canada, distribution and storage facility. The site will process 2,800 barrels per day of used motor oil into a range of base stocks and related petroleum products.
The re-refinery, which will produce Group II and Group III base oils, is scheduled to start production in the fourth quarter of 2018 and will be running at full capacity by January 2019.
The parties anticipate to have a definitive agreement executed by the end of June.