Ivanhoe Energy joins Syntroleum's Sweetwater GTL project
Ivanhoe Energy Inc. said Thursday it's acquiring a 13% stake in Syntroleum Corp.'s gas-to-liquids project in western Australia for $19 million cash plus an additional $2 million for front-end engineering and project development costs.
Ivanhoe Energy Inc., Bakersfield, Calif., said Thursday it's acquiring for $19 million a 13% equity stake in Tulsa-based Syntroleum Corp.'s Sweetwater 10,000 b/d gas-to-liquids project, currently under development in western Australia.
Ivanhoe also will provide $2 million for front-end engineering and other project development costs. Ivanhoe said the investment gives it a strategic advantage in carrying out its plan to use Syntroleum's technology to monetize large, stranded gas deposits while producing easily transportable, clean fuels and reducing greenhouse gas emissions worldwide.
First announced in November 1999, the Sweetwater project will use Syntroleum's proprietary process to convert gas into ultra-clean synthetic specialty products such as lubricants, industrial fluids and paraffins as well as synthetic fuels. The plant is located in Western Australia's Burrup Peninsula. In February, Syntroleum signed a gas supply contract with North West Shelf Venture Partners to supply 130 petajoules/year of gas as feedstock for the plant (Oil & Gas Journal, Feb. 28, 2000, p. 36). The State of Western Australia also is providing Syntroleum with a $40 million (Aus.) loan for research and development and has purchased a Syntroleum GTL fuel license for $30 million (Aus.). Engineering work is already underway with German engineering firm Tessag INA.
Ivanhoe said it's currently discussing plans with undisclosed national petroleum corporations over various projects in which Syntroleum's GTL process would be used. Other license holders in Sweetwater include BP, Enron Corp., Kerr-McGee Corp., Marathon Oil Co., Texaco Inc., Repsol-YPF and the Commonwealth of Australia.