PetroSA hopes to treble income using expertise on fuel from gas
Mathabo le Roux
Posted to the web on: 13 July 2006
businessday.co.za
Trade and Industry Correspondent
PETROSA said yesterday that its gas commercialisation plans could see the state agency increasing revenues and profits threefold over the next five years.
PetroSA is following in the footsteps of its much larger counterpart, Sasol, by setting up partnerships in other parts of the world with a view to establishing commercial gas-to-liquids plants for the production of fuel that is seen as a cheaper and cleaner alternative to oil.
Apart from the financial upside for the state-owned enterprise, the expansion and commercialisation of its gas-to-liquids operations holds huge promise for the country’s balance of payments.
SA currently spends about 15% of its total import bill on oil. If PetroSA increased its production it could constitute a considerable saving in foreign exchange outflows, said chief financial officer Nkosemnthu Nika.
The gas-to-liquids expansion plans are in line with government policy to diversify its energy sources. Indications are the startup of the first large-scale gas-to-liquids plant could be as early as 2010.
The commercialisation plans kicked off with a technology development programme in 2001. The initiative is related to low-temperature Fischer Tröpsch technology, which is a joint venture between PetroSA, Statoil and Swiss company Lurgi.
A semicommercial plant was built in Mossel Bay, which proved successful. This will form the basis of future applications of the technology in large-scale gas-to-liquids projects.
PetroSA is pursuing an aggressive growth strategy to remain sustainable. Its aim is to increase production output to 65 000 barrels a day by 2010.
Current operations have gas feedstocks that will last only until 2008. The company has, however, undertaken the South Coast gas development project at a cost of $448,5m, which would secure feedstock until 2013.
The project was on schedule, with May as the target for the first gas to reach the refinery, CE Sipho Mkhize said.
PetroSA is pursuing a number of foreign opportunities for commercial gas-to-liquids developments.
Of these, undertakings in Algeria and Egypt were the most advanced, with an announcement on a $4bn plant in Algeria expected between September and November, said the GM of the company’s gas-to-liquids refinery, Robert Nohamba. PetroSA would have a 25% stake in the project.
“PetroSA is on the brink of a breakthrough. If we can clinch this it could have a huge potential upside for the country,” he said.
In Egypt, prefeasibility studies on a prospective gas-to-liquids plant would commence next year, Nohamba said.
Apart from prospects in Algeria and Egypt, PetroSA is exploring opportunities with countries in the Middle East, South America and Australia. It already has a stake in a proposed fuel-grade methanol project in Qatar, in line with the objective to commercialise its gas-to-liquids know-how.
In the company’s corporate strategic plan, it is envisaged that the realisation of its gas commercialisation plans would see PetroSA trebling revenues to about R20bn over the next five years, from the current R6,5bn.
Sasol’s groundbreaking gas-to-liquids plant in Qatar would be the first large-scale plant to produce liquid fuel from gas when production starts next month.
Until then PetroSA still rules the roost with its Mossel Bay plant, once regarded as a white elephant, but which remains the largest of only three gas-to-liquids plants in the world. |
