Syntroleum names contractor for first commercial-scale GTL plant

Nov 15, 1999 01:00 AM

Syntroleum Sweetwater Operations Ltd., a subsidiary of Syntroleum Corporation, and Klockner Industrie-Anlagen (INA), a member of the RWE group of companies -- the sixth largest company group in Germany -- announced the signing of a project development agreement for the first commercial-scale plant ever built using Syntroleum's proprietary gas-to-liquids (GTL) technology.
The first-phase of the agreement calls for the completion of approximately $ 4 mm of engineering design, cost build-up and execution planning. Upon completing this analysis, the parties have agreed to finalise a fixed-price engineering, procurement and construction (EPC) contract under which INA has committed to provide significant plant performance guarantees -- including throughput, product quality, product yield, gas consumption, emissions and completion schedule. Such guarantees enhance Syntroleum's ability to secure the necessary financing for the project.

Phase I work is expected to begin, subject to the completion offinal determination as to whether the plant will be located in Australia or Trinidad. The fixed price for the project is expected to be delivered by INA in mid-2000.
Known as the Sweetwater Project, the plant will have a design capacity of 10,000 bpd, converting natural gas into high margin products such as synthetic lubricants, drilling fluids, liquid normal paraffins and specialty fuels. The GTL section of the plant is currently expected to cost approximately $ 300 mm, while the specialty products refining section and associated product storage facilities are expected to add another $ 100 mm.
"This agreement brings us one step closer to our goal of commercialising GTL technology," stated Mark Agee, Syntroleum's president and COO. "We are very happy to have INA as part of the team for this project. We expect that their technical and financial experience with large-scale plant design and construction projects will add significant value as we move forward."
"After due diligence, we are convinced that Syntroleum's technology is sound and that the scale-up risks are manageable," stated Bill Fortescue, Klockner Industrie-Anlagen's senior vice president of sales. "The guarantees we will be providing for this first commercial application of a groundbreaking technology reflect our confidence in its viability. Together with our sister company Edeleanu, we are very proud to be a part of what we believe will be an industry-changing event and are eager to get underway."

RWE's revenues exceed $ 39 bn and its various divisions encompass energy/electricity, mining and raw materials, petroleum and chemicals, waste management, mechanical and plant engineering, telecommunications, construction and civil engineering industries.

In addition to developing specialty projects such as Sweetwater, Tulsa-based Syntroleum Corporation also licenses its proprietary process for converting natural gas into synthetic crude oil and transportation fuels. The process is designed for application in plant sizes ranging from 2,000 bpd to more than 100,000 bpd. Current licensees include ARCO, Enron, Kerr-McGee, Marathon, Texaco and Repsol-YPF. The company is also working with DaimlerChrysler to develop super-clean synthetic transportation fuels.

Source: Syntroleum Corporation
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