Oryx GTL plant unlikely to reach full capacity for some time - Sasol
engineeringnews.co.za
By: Terence Creamer
Published: 10 Mar 08 - 14:15
The ramp-up of the world's first commercial gas-to-liquids (GTL) plant in Qatar, which is known as Oryx GTL, continued to throw up challenges for South African petrochemicals group Sasol and its project partner, Qatar Petroleum. Further, it emerged on Monday that the capital costs associated with the Escravos GTL joint venture in Nigeria, involving Sasol and US oil giant Chevron, were also set to increase materially.
Speaking following the release of higher interim results for the group as a whole, which included a maiden operating-profit contribution from Oryx itself, CEO Pat Davies revealed that, as the plant ran at higher loads, additional "teething problems" had emerged. He also indicated that the joint venture would be hard pressed to reach its nameplate of 34 000 bl/d within the short- to medium-term.
"As we run higher loads, it is reasonable to expect that, other teething problems emerge. Now, we have some of those and we are working on them and we remain fully confident that we will continue to make progress in resolving all of the remaining teething challenges," Davies insisted.
But international energy cluster GM Lean Strauss said that it was still trying to refine what the plant's eventual operational capacity would be once modifications (which were approved last year and included the installation of additional filtration capacity) were installed in the third quarter of the 2008 calendar year.
The $1-billion facility began producing final product in January 2007, but on May 22, Sasol announced that it was experiencing technical difficulties as a result of higher-than-expected levels of fine material being produced in the Fischer-Tropsch process. Since that time, an additional $50-million, or 5% of the project's overall value, had been set aside to improve the reliability of the fixes introduced.
Strauss reported that the production of fine material had stabilised, but that it was still above the design level.
"It is very difficult to run at design capacity initially. Over time, as we optimise the plant, we will eventually get to that [34 000 bbl/d] level, and eventually exceed that. Today, our Secunda plants exceed their nameplate capacities by significant percentages," Strauss explained, referring to its coal-to-liquids (CTL) facility in the Mpumalanga province of South Africa.
During the six months to December 31, Oryx achieved an average production rate of 9 000 bbl/d, and operated stably at 16 000 bbl/d for the month of December. On single days, the plant was also able to achieve production rates of up to 20 000 bbl/d.
However, Strauss indicated that the ramp-up would not continue to rise in a straight line, particularly given that there would have to be a number of shutdowns during the current six-month period. One of these related to a planned shutdown of part of the Ras Laffan gasfield, from where Oryx draws its feedstock.
"[During] the next six months, the average will be slightly higher [than the 9 000 bbl/d achieved during the first half], but we have quite a few shutdowns to contend with," Strauss said.
Davies, however, remained bullish about the project and the GTL technology as a whole. He noted that the financial results from Oryx had exceeded its previous guidance for the period, which was that the plant would begin making a "cash contribution". "We are making an operating-profit contribution . . . so better than we signalled to the market."
He said there was also a growing pipeline of opportunities to apply both its GTL and CTL technologies, including in Nigeria, Mozambique, China, India, the US, and South Africa.
This said, he also warned of possible budgetary and schedule overruns at its second major GTL venture, namely the Escravos GTL project in Nigeria.
The project, dubbed EGTL, had been booked previously as a $3-billion project, and was being implemented by Chevron.
Davies reported that the project had been converted from lump-sum project to a reimbursable project, following a "negotiated settlement" with Chevron's contractors.
"This must have an impact on capital costs and on the schedule. We are busy studying those at the moment and it will be only later this year that we will be able to tell you by how much capital costs will go up," Davies said, stressing, though, that the project remained attractive.
Edited by: Creamer Media Reporter |
