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Technology Stocks : SLH Corp. (SYNM) - From natural gas to crude oil -- Ignore unavailable to you. Want to Upgrade?

To: James J. Franklin who wrote (110)	3/21/1998 9:34:00 AM
From: John M	Read Replies (1) \| Respond to of 281

Tokyo VD and James, I'm with both of you on this one. I'm starting to question the hype value of Syntroleum and have not seen any tangible results. I wonder how long the licencers will put up with that situation. As far as Shell being the leader in GTL, I don't agree. Their plant in Malaysia cost 1.5 billion$ and makes only 12,000 BPD - $125,000/BBL (most of it waxes). Sasol is less than $100,000/BBL. To me the Shell plant was a technical success but not an economic success. Shell always spends too much on their plants!! Here is the formula for GTL success: 1. Plants must cost $25,000/bpd or less to be commercial (Syntroleum has been saying they can do this but hasn't yet and I am starting to wonder) 2. Gas must be stranded with no gas pipeline, no market for natural gas or some other special circumstance (Alaska is a great application) 3. Liquid products must be high demand fuels (Clean Diesel, Naptha, Kerosene). The demand for waxes is too low. Build one too many plants and the whole market is saturated. Shell's Malaysia plant makes a lot of wax and little diesel. 4. Catalyst must last long enough to generate a 20% BFIT IROR before it has to be replaced. Probably needs to do better than that to be an exciting project. (3-5 year life is typical of these economics) I don't think Texaco will build their 2500 BPD plant without positive results from the pilot plant in California. That could take years. The 75 MM$ number published for this project is also too high at $30,000/bpd. I wonder if this number has grown and thats why we havn't heard anything on the progress lately? I retreated to the sidelines this week. I'm going to keep my fingers crossed for Syntroleum - I think their heart is in the right place. JM