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

To: upanddown who wrote (438)	6/30/2006 8:55:06 AM
From: Dennis Roth	Respond to of 1740

>> There are huge quantities of stranded gas with no local market.<< Yeah, thats right. Places with much more gas than their domestic economy can possibly use and aren't connected to a major market by pipeline like Russia is to Europe. Any country with so much gas that they are considering building an LNG export facility would be a good candidate. >> The gas is made available to the GTL plant at a price far below NG prices in this country. << GTL is not practical in North America. Syntroleum has already stated that they are not going to make a profit on their D.O.D. contract to provide FT fuel from their Chattanooga demonstration plant for testing. >> That is approx $60 worth of gas feedstock at today's price. The diesel will sell at a premium in Europe but how much? Let's say $100 a barrel. << A simular number exercise was done by Roger Arnold, Owner, Silverthorn Engineering in this article Will GTL Nail the Coffin Lid on Cheap NG? energypulse.net Excerpts: According to a recent report from SRI, the cost breakdown for GTL product from the proven Shell process is $7.00 for capital and depreciation, $3.00 for catalysts and utilities, and $4.00 for labor, taxes, and plant overhead. That’s $14.00 per barrel of output, exclusive of the gas input. In newer plants, it appears to require about 10 MMBtu of gas to produce one barrel of GTL product. If a barrel of GTL product is valued at $80, the effective return to the producer on 10 MMBtu of gas is $66. A valuation of $80 for a barrel of GTL product is certainly high by past standards for middle distillates. However, the past standard for crude oil was not $55 / bbl. In the world going forward, $80 / bbl is probably not unrealistic for the refinery price for premium diesel and jet fuels that are free of sulfur and PAH compounds. Later: When the efficiencies of integrating GTL with refining of heavy crude, enhanced oil recovery, power generation, and water desalination are all considered, the price needed to favor LNG production over GTL is upped considerably. If crude remains in the vicinity of $55 a barrel, it’s likely that LNG will need to fetch $10 / MMBtu or more to justify investments in LNG production over GTL. >> I have a lot of SSL but I like it better for its CTL process than their GTL projects. << I also hold some SSL. Near term the GTL will add more to SSL than the more remote CTL prospects. If the Oryx GTL project proves to be as profitable as Sasol CE Pat Davies thinks it will be, see Message 22522122 , then I would expect the Qatari's to agree to an expansion, possibly the proposed second plant, and interest in GTL from other gas rich regions of the world. For North America only CTL makes economic sense and Sasol is well placed for that because of their fifty years experiance in commercial CTL production in Africa. However, many others know how to gasify coal so they will have plenty competition in CTL too.