Gas Imaging Technology Expands Licensing Agreement From PAT


Potential Market Size $3.7 Billion


Santa Barbara, CA – September 8, 2005 -- Gas Imaging Technology, Inc., (GIT) a manufacturer of unique products that address critical needs of the oil, gas and chemical industries, announces an expanded licensing agreement with Pacific Advanced Technology, Inc. (PAT).  PAT, a developer of high-tech infrared technology for the U.S. Department of Defense, has granted a world wide exclusive license to GIT, its wholly owned subsidiary, to manufacture and sell to additional markets, a line of patented infrared gas imaging and analysis instruments under the name Sherlock®.  The Sherlock, an imaging spectrometer that can identify and quantify leaking gases, has significant applications in the petrochemical, chemical,, gas and power generation and distribution industries. 


The Sherlock not only can “see” gases invisible to the human eye, it can also quantify the amount of gas involved.  Applications for this technology are global and extensive; they include the detection and imaging of gas leaks in refineries, power and chemical plants, on oil and LNG tankers, as well as in many other facilities. In addition, the Sherlock can quantify greenhouse gases which are environmentally destructive and fast becoming tradable commodities in the international market.


Previously, the licensing agreement covered only the petroleum industry.  The license has been expanded to include the power and chemical industries, as well as oil and LNG tankers, and other industries that require compliance with EPA rules on gas detection and stack continuous emission monitoring (CEM). 


A rapidly growing application for Sherlock is risk mitigation and safety, particularly in light of the recent series of explosions at petrochemical and refining operations.  This market alone could grow to be over 50% of the total infrared imaging spectrometer market.


The market for global applications is believed to be $3.7 billion.  Applications include leak detection and repair, continuous emission monitoring of stacks, flare analysis, detection and quantification of greenhouse gases, and risk mitigation and safety.  Many types of customers make up this market, including gas compressor stations, underground pipelines, gas producers, oil and gas transfer facilities, refineries, chemical plants, service companies, power plants, regulatory agencies, environmental groups, tankers and LNG terminals.


The Sherlock is currently the only infrared imaging spectrometer that can image and quantify the amount of emitted gases observed.  “This is a crucial difference between GIT’s products and any other potential competitor,” GIT President Michele Hinnrichs said. “No one else currently has this capability.  Quantification is critical in measuring the amount of greenhouse gases emitted at refineries, chemical plants, power plants, and from stacks in order to comply with existing and anticipated regulatory requirements as well as in mitigating the risks of catastrophic fires and explosions.”


Current methods used to locate fugitive gas emission are labor intensive and time consuming and can cost a large refinery $1 million per year.  In most cases 90% of the leaks come from less than 1% of audited components.  Using the Sherlock infrared gas imaging system will allow an operator to rapidly find the large leaks and thus save in repair costs as well as cost due to lost product, reducing the $1 million per year by a significant factor. Environmental agencies as well as various oil companies have evaluated the Sherlock's capability  which has demonstrated the sensitivity to be used for the mandated leak detection and repair programs.


Greenhouse gases have become a critical environmental issue and are subject to the Kyoto Treaty in many countries, the Gas Star Program in the US, state and local ordinances, and most recently, the Regional Greenhouse Gas Initiative (“RGGI’).  RGGI is a cooperative effort by nine Northeast and Mid-Atlantic states to discuss the design of a regional cap-and-trade program initially covering carbon dioxide emissions from power plants in the region. In the future, RGGI may be extended to include other sources of greenhouse gas emissions, and greenhouse gases other than carbon dioxide.


Cap-and-trade is also a basic plank in the Kyoto Treaty. Since quantification of such greenhouse gases is a crucial element of all these programs, GIT’s Sherlock is ideally postured for the global market as the only system capable of remote imaging, analysis and quantification. For flares and stacks this means the Sherlock can be placed outside a facility’s property and still accurately image and quantify the emission.


GIT also intends to pursue the petrochemical, gas and chemical markets for safety and risk mitigation. “In the last three months there have been a series of explosions at refineries and chemical plants, including the BP plant in Texas City that killed 17 people,” Hinnrichs said.  “Our technology might have prevented these catastrophes by ‘seeing’ the major leaks and allowing remedial action to be taken in time to avert the explosion and the consequent economic losses.”


Hurricane Katrina’s impact on many of the Southeastern refineries, where major damage may have occurred, highlights the possible use of the Sherlock to help determine potentially unsafe areas by detecting and locating major leaks and allowing the refineries to repair damage more rapidly and get back into operation in less time than current methods allow.


About Gas Imaging Technology, Inc. (GIT)


GIT is a wholly owned subsidiary of Pacific Advanced Technology, a California corporation located in Santa Barbara County, California. GIT has an exclusive worldwide license for products that uniquely address compliance with new EPA standards and address critical needs of refineries, power and chemical plants, oil and LNG tankers, as well as many other facilities.  More than $14 million has been invested in development of the PAT technology underlying the Sherlock gas imaging and analysis systems.  A substantial portion of this funding came from various military, federal and commercial sources including the US Army, US Navy, US Air Force, Missile Defense Agency, DARPA, Department of Energy, State of California, Gas Research Institute, BP and Shell Global Solutions.


About Pacific Advanced Technology, Inc. (PAT)


PAT was founded in 1988 by Michele Hinnrichs for the purpose of researching and developing infrared (IR) technology for the U.S. Department of Defense (DoD). More recently, PAT has become involved with the Homeland Security Agency.  As a result of the work performed for the DoD, PAT developed several advanced IR sensors based on its patented Image Multi-Spectral Sensing (“IMSS”) technology and has marketed its products under the name “Warlock.”  Warlock is an imaging spectrometer designed for the detection and quantification of sulfur hexafluoride, chemical and biological agents, and other applications relating to homeland security and the defense industry.


Contact Information


Company Contact


Investor & Public Relations

Michele Hinnrichs


Harvey Goralnick

805 688-2088 ext. 204


212 752-9445 ext. 22