Chevron Corp. and South Africa's Sasol have agreed to create a 50:50 joint venture, Sasol Chevron Holdings, for gas-to-liquids (GTL) technology development, Chevron said Monday.
Chevron and Sasol plan to invest more than $5 billion over the next 5-10 years in GTL ventures worldwide through the venture. The companies initially announced their intention to expand their GTL activities to a worldwide scale in June 1999.
George Couvaras of Sasol was named chief executive officer and Mark Koelmel of Chevron was appointed chief operating officer of Sasol Chevron Holdings.
"Worldwide, there are trillions of cubic feet of stranded natural gas reserves for which there is no market because of their geographic location," said Richard Matzke, vice-chairman of Chevron. "Given the support for the global joint venture by our future government partners, we see GTL technology as an important key to unlocking those resources."
Peter Robertson, president of Chevron Overseas Petroleum Inc., said Chevron expects to see "profitable and expanded capability" to convert natural gas into premium environmentally friendly fuels. He noted that with more and more countries adopting rules for cleaner-burning fuels, demand for GTL products would significantly increase.
The venture will utilize proprietary technologies of both companies, draw on Chevron's strengths and resources in international upstream gas development and production, and use both parties' technical strengths and experience in marketing GTL products.
Sasol and Chevron also have entered into an agreement covering certain parts of West Africa to allow the companies to jointly grow their upstream activities and provide additional resources for the global joint venture's GTL operations. It will also promote economic ties and development of natural resources with the African countries concerned.
Sasol Chevron Holdings will actively pursue application of GTL technology for selected Chevron and Sasol gas reserves, for third-party gas reserves and on behalf of host countries seeking to monetize their gas reserves.
The joint venture's first GTL project is the Nigeria Escravos GTL project (OGJ Online, Sept. 11, 2000). The global joint venture will supply management services, operations, and expertise.