Sasol, Chevron form global GTL partnership

SouthAfrican coal and synthetic fuels conglomerate Sasol Ltd. has signed an agreement with U.S. major Chevron Corp. to create a global gas-to-liquids (GTL) technology joint venture.

The alliance "will build on the technical strengths of each company in international upstream gas development and the production and marketing of GTL products," said the companies.

The partners plan to link Sasol's slurry-phase distillate process with Chevron's hydrocracking technology-called Isocracking-in pursuit of GTL projects with outside partners. The deal will not affect Sasol's existing agreements with other GTL players.

Synergies

The newly announced JV might seem an odd pairing at first sight, with one partner looking to secure a role on the global stage and another on the rebound from a potential marriage with Texaco Inc. (OGJ, June 7, 1999, Newsletter). Yet Sasol's GTL know-how and Chevron's global exploration and production portfolio and processing technology could be the dream ticket if, as Sasol contends, GTL offers the most promising prospects for the marketing of environmentally friendly fuels in the 21st century.

Announcing the deal, Sasol Managing Director and CEO Pieter Cox said, "There are numerous synergies between Sasol and Chevron that will enable the alliance to accelerate the implementation of GTL ventures.

"We are confident that this joint venture will further strengthen Sasol's position as the world leader in Fischer-Tropsch technology. Chevron has also invited Sasol to participate in several upstream oil and gas exploration opportunities."

The partnership grew out of a feasibility study into building a GTL plant alongside Chevron's Escravos gas plant in Nigeria. The JV has hiked the plant's capacity estimate to 30,000 b/d from 20,000 b/d: "We are confident that the project will be sanctioned before the end of this year, when design work should commence to allow the plant to come on stream in 2003."

GTL's future

Richard Matzke, president of Chevron Overseas Petroleum Inc., said: "Gas-to-liquids technology is so promising that its development could create an entire paradigm shift throughout the petroleum industry.

"There are trillions of cubic feet of natural gas throughout the world, isolated from the traditional gas infrastructure.

"We believe application of GTL technology will become the preferred method to commercialize such natural gas resources."