Sasol Chevron Moving on Australian GTL Project as Oryx Goes Onstream

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Researched by Industrial Info Resources (Sugar Land, Texas). Following the announcement by Sasol (NYSE:SSL ) (Johannesburg, South Africa) that the Oryx GTL (gas-to-liquid) plant in Qatar had produced its first products. Chevron Corp (NYSE:CVX ) (San Ramon, California) and Sasol confirmed that they were engaged in studying the feasibility of a GTL project in Western Australia.

Based on the operation of the two companies’ existing joint venture, Sasol Chevron, Chevron would be responsible for the upstream development of the project and Sasol Chevron would handle the downstream operation with a gas feed from the Wheatstone field, which was discovered in 2006 and is estimated to hold about 3 billion cubic feet of gas, Chevron also owns 50% of the $10.4 billion Gorgon LNG project off Western Australia, which had the way cleared for environmental approval in December 2006. Gorgon is sited on Barrow Island and the Wheatstone field is adjacent to Barrow Island and the North West Shelf gas fields. It has been estimated that the proposed GTL project would need a minimum feed resource of at least 4 trillion cubic feet (TCF) of gas.

The Australian GTL project would take a current estimated investment of about $10 billion and could have a 200,000-barrel per day (bpd) capacity of synthetic diesel fuel. At present, Chevron is continuing to work with its partners, ExxonMobil (NYSE:XOM ) and Shell (NYSE:RDS.B ) (London, United Kingdom), on containing cost increases on the Gorgon LNG project, which could be finalized in mid-2007.

In Qatar, Sasol said that the Oryx project, which is producing waxy synthetic crude, would now move to testing the product work-up unit and that production would be ready for the international market by the end of March. After the plant’s official inauguration in June 2006, it has undergone a sequential plan to test the processes, which has been watched by the industry at large, as the project is the pioneer for the large-scale commercial production of GTL.

The Oryx project will convert 330 million cubic feet of gas from Qatar’s North gas field into 34,000 bpd of ultra low sulfur diesel with an output of 24,000 bpd diesel, 9,000 bpd naphtha, and 1,000 bpd liquid petroleum gas (LPG). Diesel will be exported to Europe, naphtha to the Far East and LPG will go to the domestic market. Qatar Petroleum has a 51% stake in the project and Sasol 49%.

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