Monday, December 17, 2012

Sasol Betting Big on Gas-to-Liquid Plant in U.S.

With regional prices for natural gas far below levels expected by the historical linkage to crude pricing, the gas-to-liquids technology is intriguing.
The New York Times provides an article with prospective new plants in the United States, but also with warnings that the technology may not be nearly as promising as it's promoters suggest.

Sasol Betting Big on Gas-to-Liquid Plant in U.S. -

...the record for converting gas to liquids is spotty.

The newest and largest plant in operation, Royal Dutch Shell’s giant Pearl plant, also in Qatar, cost the leviathan sum of $19 billion, more than three times its original projected cost, and has been plagued with unexpected maintenance problems. BP and ConocoPhillips built and briefly operated demonstration plants in Alaska and Oklahoma, but stopped short of full development of the technology. Exxon Mobil and ConocoPhillips announced plans to build giant plants in Qatar, but backed out, putting their capital instead into terminals to export liquefied natural gas.
“The reason you see so few G.T.L. plants is the economics are challenged at best,” said William M. Colton, Exxon Mobil’s vice president of corporate strategic planning. “We do not see it being a relevant source of fuels over the next 20 years.”
Many analysts and industry insiders say the technology makes sense only when oil and gas supplies and prices are far out of balance, as they are today in Qatar and the United States. When oil and gas come into alignment, gas-to-liquids ventures will become white elephants, these skeptics say. Environmentalists also say that the huge energy inputs required to transform natural gas into diesel or other fuels negate any greenhouse gas benefits.

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