Sasol moves ahead with new Louisiana gas-to-liquids study
By: Terence Creamer
13th September 2011
South African energy and chemicals group Sasol has pulled the trigger on another North American gas-to-liquids (GTL) feasibility study – this time for a two-million to four-million-ton-a-year (48 000 bl/d to 96 000 bl/d) facility in the US state of Louisiana.
The JSE-listed group is already studying the development of a GTL facility for either Alberta or British Columbia, in Canada, where it and its partner Talisman Energy hope to convert shale gas produced at their Farrel Creek joint venture, in the Montney basin, of British Columbia. The Canada GTL feasibility study began six months ago.
It is also in the advanced stages of commercial negotiations, together with its partner Petronas, on the development of a GTL facility in Uzbekistan.
The South African group, which has proprietary technology capable of converting coal and natural gas into fuel and chemicals, recently spent R14.2-billion acquiring 50% of Farrel Creek, as well as half of Talisman’s Cypress A shale gas assets.
New CEO David Constable has reported that Sasol is receiving regular enquiries to partner with others in exploiting what is currently a growing arbitrage opportunity between the price of gas and oil.
The opportunity has arisen as a result of the discovery of unconventional resources such as shale gas, which Sasol estimates could grow to comprise around 45% of North American supply by 2035, from around 14% currently.
On Tuesday, Sasol confirmed that it had selected a site in the south-western region of the state of Louisiana, in the US, for a possible plant, which could become the first plant in the US to produce GTL transportation fuels and other products.
No capital estimate was ascribed to the project, but should it proceed it would involve an investment running into billions of dollars.
Sasol tells Engineering News Online that the feasibility study will consider matters such as operations, capital investments, marketing alternatives, gas supply options and logistics, and will run into tens of millions of US dollars.
For over 60 years, the South African company has produced more than 1.6-billion barrels of liquid fuels and chemicals primarily from coal, as well as some natural gas.
Louisiana Governor Bobby Jindal and Sasol new business development MD Ernst Oberholster announced jointly that the feasibility study, which would endure for 18 months, would evaluate the viability of a GTL venture in Calcasieu Parish.
Should it proceed, Sasol would apply its GTL technology to convert Louisiana’s abundant natural gas resources into fuel to be consumed in the US, which is keen to reduce its dependence on foreign oil. The feedstock supply will be the subject of detailed study during the feasibility stage.
The group already produces GTL at the Oryx joint venture with Qatar Petroleum, in Qatar, in the Middle East, and the high-quality fuel can be used in existing vehicles and fuel delivery infrastructure without modifications.
“GTL fuels are an important part of the energy mix because they can advance energy independence in a way that is both cost-efficient and environmentally friendly,” Oberholster said in a statement.
The GTL project was highlighted the second “first of a kind” development to be announced by Sasol for the US in less than a year. In December 2010, Sasol announced the world’s first Ethylene Tetramerization Unit, also to be built in Calcasieu Parish.