Sasol And ChevronTexaco To Get $1 Billion Annual Boost From Gas-To-Liquid Partnership

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). The 50-50 joint venture between Sasol (JSE:SOL) (Johannesburg, South Africa) and ChevronTexaco (NYSE:CVX) (Houston, Texas) to operate gas-to-liquid plants is expected to contribute $1 billion per year to the bottom line of the partnership within ten years. Sasol technology enables countries to convert rich gas resources into more easily transportable liquid fuel and chemicals. It also has the benefits of enabling countries like Nigeria to convert the normally flared and wasted oilfield gas by-product into liquid fuel with the accompanying environmental advantages.

Sasol has opened a $20 million catalyst plant at De Meern in the Netherlands in a joint venture with the catalyst specialist Engelhard (Amsterdam; Fresno, California; Cateret, New Jersey). The catalysts will be used in a series of gas-to-liquid plants that Sasol is planning to build around the world as a key part of the company's growth. The new cobalt catalyst plant has been sited in the Netherlands, rather than in South Africa, because of synergies with existing Engelhard facilities. The plant is the first physical asset in the company's gas-to-liquids strategy. Sasol sees a forthcoming explosion in demand for the environmentally friendly diesel, which is produced by gas-to-liquids plants. Sasol Technology developed, tested and refined the cobalt catalyst at bench and pilot scales between 1992 and 2000 at its R&D facilities in South Africa. Engelhard built the fully automated, mutli-step manufacturing process. In the final process step, the cobalt catalyst is coated with Sasol's specialty Fischer-Tropsch waxes as a protective coating. A key component, a high purity alumina, is sourced from Sasol Chemie in Europe.

The Nigerian 34,000 bbl/d plant at Escravos is due to come on stream in 2005 and will produce mainly GTL fuel with some naphtha and liqueified petroleum gas (LPG). Sasol is working with another partner, Qatar Petroleum, on a 34,000 bbl/d plant which will also produce GTL fuel, GTL naphtha, and LPG plant at Ras Laffan in Qatar, which is also planned to start operating in 2005. This plant will consume about 340 million cubic feet a day of natural gas from Qatar's huge North Field gas reserves.

A $1 billion investment package, similar to the Ras Laffan operation, is at present being engineered for a similar Sasol-ChevronTexaco plant in Australia. This will be a first stage synthetic fuels plant aimed at diesel markets. Output in excess of fuel production requirements will be converted to naphtha or LPG.

Another $1 billion facility with scale and outputs similar to Ras Laffan has been the subject of discussions between Sasol and Iran. Current indications are that this project will soon receive the go-ahead. The Sasol-ChevronTexaco joint venture is looking at global investments, which together could top $5 billion in the next five to ten years.

The new generation GTL fuel produced through the three-step Sasol Slurry Distillate Process has virtually no sulphur (less than five parts per million, a high cetane number (greater than 70), and a notably low aromatic content (less than one per cent). This enables significant tailpipe emission reductions over a range of particulates, oxides, and compounds. It also has a significant combustion advantage.

In the future GTL naphtha could become a fuel of choice in fuel cell applications and therefore an important element in the energy mix.