By OGJ editors
HOUSTON, June 5 -- Marathon Oil Corp. unit Marathon Oil Co. and Tulsa-based Syntroleum Corp. said they will expand on the design and capabilities of the planned demonstration gas-to-liquids complex now under construction at Catoosa, Okla., near Tulsa. The GTL plant—which is slated for completion in mid-2003—is part of an ultraclean-fuels production and demonstration project being managed by the US Department of Energy's National Energy Technology Laboratory.
The expanded design will include the installation of a gas turbine and other equipment to make the completed $36 million, 70 b/d unit "mirror" the major workings of a commercial-scale plant.
DOE will supply $16 million in funding for the project, while Marathon will supply most of the remaining funding, including that for "additional equipment to better evaluate the probable cost of scaling up the demonstration plant and to support future operator training for commercial-scale GTL plants after the DOE project is complete," Syntroleum said.
Marathon also is providing technical and project management personnel to work with Syntroleum in the engineering, construction, and operation of the plant. Syntroleum will contribute "key components" from its previously developed GTL demonstration plant, which has been relocated from Washington state to Tulsa. Also, "The agreement contemplates the additional participation of other Syntroleum licensees in the project," Syntroleum said.
Marathon's additional investment will grant the company access to the plant for operator training as well as the right to convert its original venture capital into a combination of credits against future license fees and Syntroleum stock at no less than $6/share, Syntroleum explained. "Additionally, under the new agreements, a previous contractual restriction that prevented Marathon from acquiring more than 10% of Syntroleum's common stock has been waived," the company said. Presently, Marathon holds less than a 1% equity interest in Syntroluem.
"This additional commitment is consistent with Marathon's integrated gas strategy—a key element of which is to commercialize stranded gas reserves using a variety of technologies, including Syntroleum's gas-to-liquids technology," said Tim Tipton, Marathon vice-president, technology. "While the Port of Catoosa complex is small, it is a complete GTL demonstration facility that mirrors a commercial-scale plant, allowing us to not only gain process knowledge and experience, but also train operators in anticipation of the possible development of a commercial-scale plant," he added.