Syntroleum, Advantage and ENAP to conduct study for Chilean plant

Aug 29, 2001 02:00 AM

Syntroleum Corporation announced that it has signed an agreement with Empresa Nacional del Petroleo (ENAP), the national oil company of Chile, and Advantage Resources International, headquartered in Denver, Colorado to conduct a project assessment study for a 10,000 bpd synthetic fuels plant to be located at the ENAP-owned Cabo Negro Industrial Park near Punta Arenas, Chile. The proposed project would utilize currently available natural gas delivered by pipeline from fields in Argentina and Chile.
ENAP has expressed its intent to purchase and transport the fuels produced at the plant directly to consumers in Santiago, Chile. Because Santiago lies in a central valley between two mountain ranges, it experiences some of the world's most serious air quality problems.
The government of Chile has declared a national priority for establishing tougher fuels emissions standards to improve air quality in the "Valle Central." According to Ron Roberson, a spokesman for Syntroleum, the study should be completed before the end of this year, since much of the groundwork has already been accomplished from previous site visits and surveys by Syntroleum's engineering and project development staff.

The Cabo Negro Industrial site already hosts a large methanol plant operated by Methanex (Canada), a natural gas liquids (NGL) fractionation plant operated by ENAP, warehousing and construction yards for offshore oil and gas projects and marine export terminals that are already scheduled for future expansion.
If the study confirms expectations of the parties regarding the viability of the project, ENAP and Advantage have expressed interest in obtaining a site license for Syntroleum's proprietary gas-to-liquids (GTL) technology and commencing front-end engineering and design (FEED) for the plant during the first quarter of 2002. A completion schedule for the project will be established when the final decision is made by the owners to proceed with construction.

Advantage and ENAP have been exploring for oil and gas in the Tierra del Fuego basin for over 12 years. In 1991, they discovered a potentially significant gas field while looking for oil. The absence of a local market for the gas precluded further delineation drilling and development of the find.
"This is one of several potential GTL projects that we are pursuing in Latin America," stated Mark Agee, president and COO of Syntroleum. "We are eager to complete the assessment study and move this opportunity closer to becoming a firm project."
"We believe the advent of gas-to-liquids technology provides us with a viable alternative to traditional gas marketing," stated Dr. James Dean, president of Advantage Resources. "This not only gives us the possibility of finally monetising this asset, but also provides additional impetus to explore for more gas in the basin. Chile is a logical place for this first step to be taken due to the government mandate to introduce cleaner diesel fuel into the Santiago area."

Advantage Resources International is a privately held oil and gas exploration and production company headquartered in Denver, Colorado. Founded in 1960, the company has been active in South America since 1985 and maintains offices in Lima, Peru, Buenos Aries, Argentina and Santiago, Chile.

Syntroleum, headquartered in Tulsa, Oklahoma, 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 the Arco (now BP), Enron, Ivanhoe Energy, Kerr-McGee, Marathon, Repsol-YPF, Texaco, and the Commonwealth of Australia. Using its proprietary technology and in partnership with others, the company plans to build GTL plants with significant equity participation by Syntroleum in a number of global locations.

Source: Syntroleum Corp.
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