Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : SASOL LTD. (SASOY) -- Ignore unavailable to you. Want to Upgrade?

To: IPOJunkie who wrote (9)	5/7/1998 11:21:00 PM
From: John M	Read Replies (1) \| Respond to of 27

IPO, SASOL is the grandaddy of them all - been around since 1950. GTL has always cost too much to be commercial. SASOL was able to run their plants because they were subsidized by the south african government. South Africa was embargoed because of appartied so they could not buy oil. Had to make their own fuel from gasification and FT conversion of coal. Anyway they are not subsidized any more and have the most experience and expertise. Plants cost $30,000/bpdcapital the lowest commercial numbers. SASOL wants to partner with large oil companies not just licence their technology. SASOL uses iron but is also developing a cobalt catalyst. Cobalt is the future for natural gas conversion. Shell's process uses cobalt - they built a plant in Malaysia. This plant makes 12,000 bpd and cost $1.5 billion ($125,000/bpd). Plant designed mainly to make waxes that they were selling for about $100/bbl. Also made some diesel that was sold to TOSCO refinery at an $8/bbl premium to CARB#2 diesel ($33/bbl). Plant burned down last christmas when oxygen plant caught on fire. They will probably not rebuild it. It cost too much anyway. Exxon has built a 200 bpd pilot plant that works. Don't know how much a commercial plant will cost but bet it is closer to Shell's numbers. Exxon tend to gold plate. Uses cobalt. RNTK built a 250 bpd plant in 1992 in Pueblo, Co. at a cost of $25 million ($100,000/bpd). Plant was put on a landfill but landfill had only 1/10th of the methane in it than was expected. It was hutdown immediately after start-up. They decided to buy some gas from the pipeline and run it to see if it would work. They ran it for a few weeks and decided it worked. Their design includes a CO2 removal plant (theirs is the only one with this). I think it adds unecessary cost to the system. They use iron catalyst which produces CO2 instead of water as a by-product. This reduces efficiency somewhat. This plant was moved to India and upgraded to produce 360 bpd. Still costs $25 million dollars ($70,000/bpd). Very expensive still. India plant will produce waxes said to sell for $160/bbl. Plant has excellent economics because of the wax sales. Wax market not that big though so got to be careful that too many plants are not built. Syntroleum got everybody excited (major oil companies) two and a half years ago when they announced that they could build a plant for $25,000/bpd or less. They use air instead of oxygen for the reaction which eliminates the cost of the oxygen plant. They also announced that they had a chain-limiting catalyst that only produced diesel, kerosene and naptha. This dropped their expected price to less than $20,000/bpd by getting rid of hydrocracker step at the end of the process. Well 2 years have passed and they still have not proven any of this. In fact the first cost estimate for the Texaco Trinidad project priced out at $40,000/bpd. They have a long way to go before they are a commercial competitor. They do have a 70 bpd pilot plant at ARCO Cherry Point refinery with start-up end of this year. If it is a success, they will have an advantage over the others because they use air instead of oxygen. Must wait and see on them. Couple of others developing processes: Williams Brothers and BP. Both are being very secretive. Don't know anything about it. RNTK has inside track on refinery bottoms by working exclusively with Texaco. In this application the oxygen plant, gasifier, hydrocracker, distillation towers, loading racks may already be in place in the refinery. Only have to buy RNTK FT reactor. I think they will succeed here. Read Yahoo-rntk thread. You will find better info there. JCM