Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

South African Company to Build U.S. Plant to Convert Gas to Liquid Fuels
New York Times ^ | December 3, 2012 | CLIFFORD KRAUSS

Posted on 12/04/2012 5:50:36 AM PST by thackney

WESTLAKE, La. — In an ambitious bet that the glut of cheap natural gas in the United States will last for many years, a South African energy company announced on Monday that it would build America’s first commercial plant to convert natural gas to diesel and other liquid fuels.

The company, Sasol, which is based in Johannesburg, has been a pioneer in a technology that has tantalized energy scientists for decades over its potential to produce liquid fuels without using oil, which has historically cost far more than natural gas.

Having already built smaller plants in South Africa and Qatar, Sasol has designed its new Louisiana plant to produce 96,000 barrels of fuel a day using its “gas to liquids,” or G.T.L., technology. It will be the second-largest plant of its kind in the world, after Royal Dutch Shell’s Pearl plant in Qatar, and will cost $11 billion to $14 billion to build.

“By incorporating G.T.L. technology in the U.S.A.’s energy mix, states such as Louisiana will be able to advance the country’s energy independence through a diversification of supply,” said David Constable, Sasol’s chief executive, at a news conference here Monday near the project’s planned location.

The facility will include a gas processing plant, a chemical plant and a refinery. All are required to perform the alchemy of converting natural gas into diesel, jet fuel and other chemical products.

What makes this southwestern corner of Louisiana attractive to Sasol is its proximity to bountiful shale gas fields just north of here and west in Texas. A boom in shale drilling has reduced the price of natural gas in the United States in the last four years by more than two-thirds, encouraging many energy and chemical companies to build and expand manufacturing plants around the Gulf of Mexico...

(Excerpt) Read more at nytimes.com ...


TOPICS: News/Current Events; US: Louisiana
KEYWORDS: diesel; energy; naturalgas
1,200 permanent jobs

7,000 construction jobs

1 posted on 12/04/2012 5:50:49 AM PST by thackney
[ Post Reply | Private Reply | View Replies]

To: thackney

So is the epa going to stop construction and the sierra club sue over inch of pipeline needed to supply product to market?


2 posted on 12/04/2012 5:59:37 AM PST by edcoil (It is not over until I win.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: thackney
"The facility will include a gas processing plant, a chemical plant and a refinery. All are required to perform the alchemy of converting natural gas into diesel, jet fuel and other chemical products."


Sounds like a lot more goes into the conversion than what comes out.

Disclaimer - I'm no chemist, scientist or even an intellectual.

Just a guy that reads ...

3 posted on 12/04/2012 6:05:07 AM PST by knarf (I say things that are true ... I have no proof ... but they're true)
[ Post Reply | Private Reply | To 1 | View Replies]

To: knarf

Nat gas is America’s ace in the hole.
There’s no telling how many products can be made from low cost gas.


4 posted on 12/04/2012 6:07:15 AM PST by Eric in the Ozarks (In the game of life, there are no betting limits)
[ Post Reply | Private Reply | To 3 | View Replies]

To: thackney

Good!


5 posted on 12/04/2012 6:11:30 AM PST by SueRae (It isn't over. In God We Trust.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: thackney

Can I get a rig to do this at home?


6 posted on 12/04/2012 6:13:09 AM PST by Paladin2
[ Post Reply | Private Reply | To 1 | View Replies]

To: thackney

Noted in the tone of the article..cost overruns, only in use in a few places, can only supply 1%...etc. What a bunch of whiners.

Good for Governor Jindahl and Louisiana. Are those construction jobs union or is La. a ‘right to work’ state?
With risk comes reward...the first new ‘refinery’ in decades. I wish them well. I’ve never been keen on driving a car driven on nat. gas...if they can get a liquid product, that will solve my issue.


7 posted on 12/04/2012 6:17:13 AM PST by SueRae (It isn't over. In God We Trust.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: sully777; vigl; Cagey; Abathar; A. Patriot; B Knotts; getsoutalive; muleskinner; sausageseller; ...
Rest In Peace, old friend, your work is finished..... If you want ON or OFF the DIESEL ”KnOcK” LIST jut FReepmail me..... This is a fairly HIGH VOLUME ping list on some days.....
8 posted on 12/04/2012 6:22:57 AM PST by Red Badger (Lincoln freed the slaves. Obama just got them ALL back......................)
[ Post Reply | Private Reply | To 1 | View Replies]

To: sully777; vigl; Cagey; Abathar; A. Patriot; B Knotts; getsoutalive; muleskinner; sausageseller; ...
Rest In Peace, old friend, your work is finished..... If you want ON or OFF the DIESEL ”KnOcK” LIST jut FReepmail me..... This is a fairly HIGH VOLUME ping list on some days.....
9 posted on 12/04/2012 6:23:50 AM PST by Red Badger (Lincoln freed the slaves. Obama just got them ALL back......................)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Eric in the Ozarks
Except there's no George Washington Carver doing the research ... but only after years of 'study' and millions in tax payer research money .. the government will be the inventor, innovator and etcetera.


I'm forced to rearrange my thought processes to EXclude the people and ways of that recent past and ... because I'm futuristically challenged (I'll be dead in 10-15 years) ... I can only conclude ... the government will control natgas, and not the companies that are putting up the dollars to drill and frack and refine.


I want to be that dog with his head stuck out of a 1940's sedan in a Norman Rockwell illustration.

10 posted on 12/04/2012 6:23:54 AM PST by knarf (I say things that are true ... I have no proof ... but they're true)
[ Post Reply | Private Reply | To 4 | View Replies]

To: thackney

In addition to this petrochem project is a new casino resort construction project just across the lake. Things will boom in the area for a while and push rental housing costs up.


11 posted on 12/04/2012 6:24:41 AM PST by 1hedLyte
[ Post Reply | Private Reply | To 1 | View Replies]

To: knarf

“Sounds like a lot more goes into the conversion than what comes out.”

You are right, but it is not that bad, and, if stupid windmills make sense (they don’t) and ethanol makes sense (it doesn’t) this is very important technology to get going. F-T is better return on EI/EO than either of those. It is important to take into consideration “all-in” costs...not just those inside the factory fence of a power plant. Nat gas infrastructure is already largely in place, and, the pipes for transporting the output of such a plant are generally already in place. Recognize that historically, we absolutely save several bucks per gallon by having a large military presence in the mideast-—which we pay for in other ways, of course. Not wanting to get into a macro discussion of “all-in” costs, but they are important to consider. And, this process would be useful for coal which, like it or not, it would be nice to not burn as much as we do.

When the day comes that excess heat from a nuclear reactor can assist in driving the reactions (collectively known as Fischer-Tropsch) in gas-to-liquids we would be sitting pretty in terms of the elusive goal of freeing ourselves from foreign oil.

Lastly, it is by no means assured that nat gas will “always” bear the low “glut” price it does at present. Yes, we have plenty...I am just pointing out a typical piece of human brain self-trickery.


12 posted on 12/04/2012 6:26:34 AM PST by Attention Surplus Disorder (This stuff we're going through now, this is nothing compared to the middle ages.)
[ Post Reply | Private Reply | To 3 | View Replies]

To: SueRae

You say you’ve never been keen on using NG for vehicles.

Vehicles powered by a clean and more than adequate supply of fuel would seem a very good way to get us away from Mid East oil.

Curious as to why you don’t think is a good idea. Explain, please.


13 posted on 12/04/2012 6:27:26 AM PST by X-spurt (Ted Cruz for President of the Republic of Texas)
[ Post Reply | Private Reply | To 7 | View Replies]

To: SueRae

Right to work state. Mostly non union construction/maintenance jobs. Wages slightly lower than the southeast Texas area. Drug free local workers have been hard to come by in recent years, so I’ve heard.


14 posted on 12/04/2012 6:29:25 AM PST by 1hedLyte
[ Post Reply | Private Reply | To 7 | View Replies]

To: Paladin2
Can I get a rig to do this at home?

Sure, for a mere $14 Billion.

15 posted on 12/04/2012 6:30:04 AM PST by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 6 | View Replies]

To: Eric in the Ozarks
Nat gas is America’s ace in the hole.

Yeah, but only as long as the aceholes in DC don't stop it from being used because of 'Global Warming'.........

16 posted on 12/04/2012 6:30:04 AM PST by Red Badger (Lincoln freed the slaves. Obama just got them ALL back......................)
[ Post Reply | Private Reply | To 4 | View Replies]

To: thackney; Paladin2
Can I get a rig to do this at home?

Sure, for a mere $14 Billion.

BUT WAIT! IF YOU CALL RIGHT NOW, WE'LL DOUBLE YOUR ORDER! YOU'LL GET TWO COMPLETE GTL PLANTS FOR THE PRICE OF JUST ONE! JUST PAY SEPARATE PROCESSING AND HANDLING.............

17 posted on 12/04/2012 6:32:44 AM PST by Red Badger (Lincoln freed the slaves. Obama just got them ALL back......................)
[ Post Reply | Private Reply | To 15 | View Replies]

To: knarf

18 posted on 12/04/2012 6:33:41 AM PST by Paladin2
[ Post Reply | Private Reply | To 10 | View Replies]

To: knarf
Sounds like a lot more goes into the conversion than what comes out.

The technology is proven. Shell has a couple commercial working facilities as well as Sasol outside the US. The learning curve is mostly achomplished but I'm sure there will be refinements.

Prior to now, the economics only worked where there was a much greater supply of Natural Gas than could be supplied locally. The feedstock to the GTL facility competed with LNG exports; low price local natural gas to be exported elsewhere. The value of delivering much more expensive transportation liquid fuels versus spending the money to make LNG was the economic point.

Shell has talked about it for years here in the US but said the economics had not worked. I read this plan of investment in belief that the Natural Gas price is going to stay low in the US for some time.

19 posted on 12/04/2012 6:36:05 AM PST by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 3 | View Replies]

To: thackney

What a WASTE!! Natural Gas has much higher value than converting it to liquid. It is the perfect fuel for heating and cooling buildings and providing feedstock to petrochemical plants.

Coal is not effective for either of those uses, but is abundant.

Sasol has good coal liquefaction technology and could apply that rather than their gas-to-liquid technology.


20 posted on 12/04/2012 6:36:58 AM PST by ProtectOurFreedom
[ Post Reply | Private Reply | To 1 | View Replies]

To: thackney

“Only a handful of gas-to-liquid plants operate commercially in Malaysia, South Africa and Qatar, and they collectively produce a bit more than 200,000 barrels of fuels and lubricants a day — the equivalent of less than 1 percent of global diesel demand.”

Why bother? I got an idea: Drill baby drill.


21 posted on 12/04/2012 6:37:56 AM PST by ILS21R (Everything... IS... a conspiracy)
[ Post Reply | Private Reply | To 1 | View Replies]

To: ProtectOurFreedom
Natural Gas has much higher value than converting it to liquid.

No, just the opposite.

In 2013, natural gas is expected to be $3.34 per MMBtu. It should average $2.65 per MMBtu in 2012.

http://www.eia.gov/forecasts/steo/archives/Sep12.pdf

The current price of diesel in the US is over $31 per MMBTU. There is a lot of room to spend money on the conversion and still profit on the conversion.

22 posted on 12/04/2012 6:43:58 AM PST by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 20 | View Replies]

To: thackney

Another reason for gas to liquid conversion is the 1000x “compression” that occurs.

There is lots of stranded natural gas ie gas that is too far away from viable markets. Currently they flare it. Having the ability to turn this waste product into usable crude is a good thing.


23 posted on 12/04/2012 7:15:53 AM PST by between_the_lines_mn
[ Post Reply | Private Reply | To 22 | View Replies]

To: X-spurt

I suppose for the same reason I’m not crazy about gas grills..I’m afraid of a collision/exposion. Let me know when they make the tanks leakproof/crash proof.

I know that sounds a bit paranoid..but even gas grills make me nervous (have had/seen a flareup or two). So, I still use charcoal.


24 posted on 12/04/2012 7:20:12 AM PST by SueRae (It isn't over. In God We Trust.)
[ Post Reply | Private Reply | To 13 | View Replies]

To: thackney

This has been done before. Founded by Sam Mosher in 1922 as the Signal Gasoline Company, Signal was originally a California company that produced gasoline from natural gas.


25 posted on 12/04/2012 7:24:47 AM PST by 1raider1
[ Post Reply | Private Reply | To 1 | View Replies]

To: knarf

GTL is very energy intensive, but feasible.

Its economic feasibility is determined by the relative economic value of natural gas and liquid fuels.

Sasol has a lot of experience with this. In South Africa, they gasify coal to obtain the gas feedstock for GTL.


26 posted on 12/04/2012 7:25:14 AM PST by Skepolitic
[ Post Reply | Private Reply | To 3 | View Replies]

To: knarf

GTL is very energy intensive, but feasible.

Its economic feasibility is determined by the relative economic value of natural gas and liquid fuels.

Sasol has a lot of experience with this. In South Africa, they gasify coal to obtain the gas feedstock for GTL.


27 posted on 12/04/2012 7:25:38 AM PST by Skepolitic
[ Post Reply | Private Reply | To 3 | View Replies]

To: 1raider1

I believe you are referring to capturing the natural gas liquids from a “wet” gas well to separate out gasoline components.

This process is converting methane to much heavier hydrocarbons like Octane, Octene, Decane, Decene, etc.


28 posted on 12/04/2012 7:47:33 AM PST by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 25 | View Replies]

To: between_the_lines_mn
There is lots of stranded natural gas ie gas that is too far away from viable markets. Currently they flare it.

The amount flared is way less than it used be typically done. Places like the Alaskan North Slope now re-compress and inject back in the reservoir the gas produced but not used.

Most of the royalty owners now require payment of the loss of gas if flared. Producing companies are financially penalized now if flared. So if the quantity is significant in a locations, it is either sent to market or back to the field.

29 posted on 12/04/2012 7:52:17 AM PST by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 23 | View Replies]

To: SueRae

I understand that in South Korea a lot of their vehicles are running on hydrogen. Very explosive! But I have not seen one report of any of these hydrogen tank explosions. Reckon none are getting involved in wrecks?

When I was growing up in East Texas, quite a few people ran their pickups and cars on propane, apparently as safely as gasoline.

Most likely CNG or LNG tanks are being designed to withstand severe collision and puncture incidents. There are many 18 wheelers and trains hauling 5,000 or 10,000 gallon tanks of LPG/LNG everyday.


30 posted on 12/04/2012 8:00:46 AM PST by X-spurt (Ted Cruz for President of the Republic of Texas)
[ Post Reply | Private Reply | To 24 | View Replies]

To: SueRae
I know that sounds a bit paranoid..but even gas grills make me nervous (have had/seen a flareup or two). So, I still use charcoal.

I use charcoal because I want my food taste like is been Barbecued.

31 posted on 12/04/2012 8:03:38 AM PST by painter (Obamahood,"Steal from the working people and give to the worthless.")
[ Post Reply | Private Reply | To 24 | View Replies]

To: thackney

137 EPA jobs
387 Justice Department jobs
14 Department of wild life and Fisheries jobs


32 posted on 12/04/2012 8:08:58 AM PST by bert ((K.E. N.P. N.C. +12 .....The fairest Deduction to be reduced is the Standard Deduction)
[ Post Reply | Private Reply | To 1 | View Replies]

To: thackney

I’ve been nibbling at Cheniere Energy (CQP), a domestic coverter of nat gas to LNG with pipelines and terminals for export.


33 posted on 12/04/2012 8:08:58 AM PST by shove_it (the 0bama regime are the people Ayn Rand warned us about)
[ Post Reply | Private Reply | To 22 | View Replies]

To: thackney

Thanks for the information.


34 posted on 12/04/2012 8:17:13 AM PST by 1raider1
[ Post Reply | Private Reply | To 28 | View Replies]

To: X-spurt
I understand that in South Korea a lot of their vehicles are running on hydrogen.

Do you have links to any information on that?

35 posted on 12/04/2012 8:21:33 AM PST by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 30 | View Replies]

To: thackney

We are almost literally awash in hydrocarbons from which we can refine suitable liquid fuel products. The only issue is if the spread between the cost of the hydrocarbon feedstock and the probable selling price is low enough to justify the capital investment and the cost of conversion. This company thinks it now is but notice the author calls this decision “an ambitious bet”.

The economist Franz Oppenheimer observed there are only two ways of gaining wealth. He called one way the “economic means” by which he meant free exchange of value. He called the other way, the “political means” by which he meant government coercion, subsidy, rent seeking, regulatory capture, etc.

I would add that this GTL project is an “ambitious bet” because with increased socialism a capitalist not only has to deal with economic risk, that is being that the project will suffer from unforeseen costs and delays, but we must now add “political risk”, that being unforeseen regulatory decisions and litigation based on specious legal theories.

The only people who would put their money at risk are those who have a very high expectation of success and where the rewards of the project are very high. This means that as the level of political risk increases, the number of projects that people are willing to fund greatly diminishes.

And we wonder why there are no jobs.


36 posted on 12/04/2012 9:02:32 AM PST by theBuckwheat
[ Post Reply | Private Reply | To 1 | View Replies]

To: Red Badger

What about nano technology replicated enough times to get 5 gal/day?


37 posted on 12/04/2012 9:24:21 AM PST by Paladin2
[ Post Reply | Private Reply | To 17 | View Replies]

To: thackney

Louisiana is a good place to build this.. it’s already stanky in many spots.. fortunately, it’s natural gas and not coal.. them plants are pretty smelly too.. spent a month at a Sasol op., in the TRansVaal , a coal to gasification project, big ‘un too, upwind, it’s great, downwind,, whewwww.

what price jobs tho? sad we have to seek out foreign expertise , can only imagine the legal hassles ahead regardless.


38 posted on 12/04/2012 9:47:35 AM PST by NormsRevenge (Semper Fi)
[ Post Reply | Private Reply | To 1 | View Replies]

To: NormsRevenge

Unlike coal, the natural gas is going to be enclosed in pipes.

Any refinery is going to have some emissions. Seeing this is taking the place of a crude oil feed refinery, I doubt it would be worse.


39 posted on 12/04/2012 9:55:53 AM PST by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 38 | View Replies]

To: Skepolitic

OK .. you can mine the coal and burn it or mine the coal, process it, THEN burn it ... right?


40 posted on 12/04/2012 11:20:19 AM PST by knarf (I say things that are true ... I have no proof ... but they're true)
[ Post Reply | Private Reply | To 27 | View Replies]

To: thackney

What will stop the EPA from sabotaging this project? This is a great project that we need more of the same. But the Federale parasites in DC are jealous of such bold private sector projects. Are jealous of the producers in America


41 posted on 12/04/2012 2:21:39 PM PST by dennisw (With age comes wisdom.)
[ Post Reply | Private Reply | To 1 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson