Syntroleum’s Technology for Joint Sinopec GTL and CTL Projects

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Researched by Industrial Info Resources (Sugar Land, Texas). An innovative Memorandum of Understanding (MoU) between Sinopec (NYSE:SNP ) (Beijing, China) and Syntroleum Corporation (NYSE:SYNM ) (Tulsa, Oklahoma) could see a GTL plant, a pilot CTL plant, and a technology development program bearing fruit over the next five years.

The non-binding agreement sees the establishment of a joint technology development plan to advance GTL technologies on an industrial scale, construction of a 17,000-barrel per day (bpd) GTL plant and a 100 bpd pilot CTL plant. The projects will use Syntroleum technology and jointly market SSTC (Sinopec Syntroleum Technology) to third parties in China through the most effective means available.

Under a technology transfer agreement, Syntroleum will provide Sinopec with access to a complete set of the Tulsa company’s proprietary GTL technologies including catalyst technologies and Fischer–Tropsch technology. These technologies will be used in China on an exclusive basis during the period of cooperation. After the signing of a formal agreement, Sinopec agrees to provide Syntroleum with $20 million per annum over the next five years to support development of the technology. Work is currently underway on a legally binding ‘Research and Cooperation Agreement.’

Both the GTL and the CTL plants will be fully capitalized by Sinopec with technological support from Syntroleum. Upon completion of the agreement, Sinopec will start feasibility studies for the construction of both plants. Sinopec’s strategy is to invest in projects to complement efforts to develop its gas reserves in the long term.

Cao Xianghong, chief engineer of Sinopec said, “We have conducted many years of research and testing on Fischer –Tropsch technology. We are convinced that Syntroleum’s slurry column reactor technology is one of the most advanced in the world.” Jack Holmes, president and CEO of Syntroleum, said that the combination of construction capability and technology will form the basis for capturing market share in China.

A further link in the cooperation between the two companies could come out of a joint visit to Syntroleum’s 50,000 bpd GTL development project with Kuwait Foreign Petroleum in Papua New Guinea. Sinopec has expressed the wish to become the main E+P+C (engineering, procurement and construction) and to cooperate on the project.

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