Engineering News

Sasol casts wide net for oil from gas, coal deals
Mon Mar 6, 2006 6:56am ET

JOHANNESBURG, March 6 (Reuters) - Officials from South Africa's Sasol, the world's biggest producer of synthetic fuel from coal, will visit India later this month to discuss a potential coal-to-liquid fuels deal, they said on Monday.

Sasol Chief Executive Pat Davies said the trip was part of a wider plan to identify new places to establish plants based on its gas-to-liquids (GTL) and coal-to-liquids (CTL) technology and that the group had been cheered by U.S. President George W. Bush's stance that the United States must break its dependence on Middle East oil.

The group is focused on China, the United States and India, which rank among the countries with the biggest reserves of coal.

Two Indian companies involved in the energy business have already held talks with the company in Johannesburg on a possible project, and Sasol is going to India for more talks.

"We are going to India to study opportunities in CTL there later this month," Davies told a results presentation.

"We are also encouraged by what President Bush had to say about ending reliance on the Middle East, and we see the opportunity in harnessing U.S. coal reserves."

In his State of the Union speech in January, Bush said he would work with the U.S. Congress on an agenda to encourage development of technologies and alternative fuels to stop what he described as America's addiction to oil.

On the GTL front, Sasol plans to launch the world's first commercial-scale GTL project, named Oryx, at Ras Laffan in Qatar in the second quarter. The plant will produce 34,000 barrels per day of liquid fuels from natural gas.

APARTHIED-ERA TECHNOLOGY

Sasol's technology, which converts coal or natural gas to liquid fuel, was developed in South Africa during apartheid rule to overcome sanctions and is now seen as a means to a develop a global footprint and expand its earnings.

Sasol has so far produced more than 1.5 billion barrels of CTL fuel, far ahead of rivals, he said, and it has a capacity of about 150,000 barrels per day of CTL.

The group said it hoped to more than double its capacity in the long term, with the bulk produced offshore.

Davies also said world business leaders at this year's Davos economic summit had expressed in Sasol's technology.

"These are not insignificant opportunities," Davies said. "Sasol in a unique position as far as oil is concerned, in view of the issues of security of supply, price and how long it's going to last. This places us in a sweet spot."

Davies said Sasol was in the early stages of seeking CTL opportunities in the United States, while it has also recently completed a feasibility study in China, which revealed a positive outcome. The company is now negotiating the framework on how to go ahead with the next phase of the project.

"We are excited about the prospect (in China) just as they are," Davies said. "China alone would double our capacity."

Source: Reuters

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