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Gold/Mining/Energy : Gasification Technologies -- Ignore unavailable to you. Want to Upgrade?

To: Dennis Roth who wrote (267)	2/15/2006 8:20:12 AM
From: Dennis Roth	Read Replies (7) \| Respond to of 1740

Chevron eyes expansion of Nigeria gas-to-liquids Reuters Wednesday, February 15, 2006; 6:24 AM washingtonpost.com LAGOS (Reuters) - Energy giant Chevron <CVX.N> wants to triple the size of its $1.7 billion gas-to-liquids (GTL) plant in Nigeria to benefit from economies of scale, the project manager said on Wednesday. Nigeria's GTL project is currently designed to convert 300 million cubic feet of gas per day into 34,000 barrels a day of liquid fuels, but Chevron has set aside a large area of reclaimed swamp in the Escravos area of the Niger Delta where it hopes to see the plant grow. "We have in mind something upscalable to 100,000 barrels per day," said Kim Fraser, who is in charge of the project, told Reuters. Chevron awarded a $1.7 billion engineering, procurement and construction contract for the plant to a consortium of Halliburton <HAL.N> unit KBR, Eni <ENI.MI> subsidiary Snamprogetti and Japan's JGC Corp <1963.T> last April. Construction began in July and it is due to come on stream in mid-2009. Fraser said any expansion of the plant would deliver economies of scale, partly because the land has already been reclaimed. The technology used to convert natural gas to liquid fuel was developed in South Africa during apartheid rule to overcome sanctions, but is only now being used elsewhere. The world's first commercial-scale GTL project is Oryx GTL, a joint venture between Qatar Petroleum and South Africa's Sasol <SOLJ.J>, which is expected to start production this quarter. Chevron's Escravos GTL project, in which state-run NNPC holds 25 percent, will produce a high quality, low sulphur diesel and naphtha, which is a feedstock used in plastics manufacturing. Sasol is also providing technology to the Nigerian plant. Fraser said the two projects could not be compared on costs because the Qatari project benefited from infrastructure which is absent in Nigeria's delta. However, the Nigerian project met Chevron's profitablity threshold at an assumed oil price of $30 per barrel, about half current prices, he added. The $1.7 billion investment is financed 100 percent by Chevron equity, he added. Africa's top oil producer has for decades flared large volumes of natural gas, despite massive power shortages, because there was no infrastructure to use it. Nigeria has recently signed several projects to monetize the resource, mostly for export, with a view to ending routine gas flaring by 2008. However, the government now fears that the plethora of gas projects -- three liquefied natural gas (LNG) plants, a West African gas pipeline, half a dozen power stations and the gas-to-liquids plant -- could lead to a shortage of gas. The government is carrying out an audit of the sector.