To: TokyoMex who wrote (9 ) 12/17/1997 7:49:00 PM From: TokyoMex Read Replies (2) | Respond to of 110
Subj: A great article for GTL industry, RNTK, SLHO (Sytroleum) By: peakspike Date: Dec 1 1997 8:46 A.M PST Reply To: Msg. 1 by YahooFinance The fields of Alaska's Prudhoe Bay contain enough natural gas to supply the entire U.S. for a year. That fuel would be worth US$69 billion if it could be sold at current prices. Instead, it is practically worthless because profit margins are too small to justify building a natural gas pipeline from Alaska to major U.S. markets. TD Half the world's supply of natural gas is locked up in remote fields like Prudhoe that cannot be exploited profitably using conventional techniques. That is why the world's biggest oil companies, including the Royal Dutch Shell Group, Exxon Corp. and British Petroleum Co., are considering investing billions of dollars in the unconventional process of turning natural gas into synthetic oil. "Over the next five to 10 years, there will be between three and 10 gas-to-liquids projects," says Paul Jahn, manager of marketing and strategy at Bechtel Group Inc., an engineering and construction company that expects to build many of the plants. Synthetic oil or the fuels made from gas can be shipped profitably by tanker or pipeline, if the cost of production is low enough. It also easily can be converted into diesel fuel, a high-value product that can be sold anywhere in world. Oil companies are betting that technological improvements have cut the cost of using the 70-year-old gas-to-liquids process enough to make diesel fuel production profitable from remote fields, despite huge initial outlays for plants and equipment. The process also is being touted as a way to aid the environment, both by preventing the burning of natural gas that cannot be shipped to market from remote wells, and by creating a clean-burning diesel fuel. The gas-to-liquids process was developed by German chemists Franz Fischer and Hans Tropsch in the 1920s. However, it has always been less expensive to refine diesel fuel from oil than from natural gas, so the process has rarely been employed. The Germans used it, extracting gas from coal to get the raw material, when their oil supplies were cut off during World War II. South Africa built plants to turn gas from coal into fuel because world sanctions against its apartheid policies prevented it from purchasing cheap oil. Now conservative estimates are that new technology has made changing gas to liquids profitable when oil prices are higher than US$20 a barrel. Others say profitability when oil prices are as low as US$15 is possible. Oil prices have averaged about US$21 this year. "Now is the time for this technology; the economics are there," says Larry Weick, a vice-president at Syntroleum Corp., a Tulsa, Okla.-based company that is licensing its own variant on the Fischer-Tropsch process to Atlantic Richfield Co., Texaco Inc., USX-Marathon Group and Argentina's YPF SA. Although companies are certain the projects can pay off, investors with deep pockets are needed to build the expensive plants. "A gas conversion project isn't a small undertaking, though it may be easy to find a billion dollars on Wall Street," says Samuel Tam, manager of advanced petroleum and chemicals technology program at Bechtel.