16 March 2007
South African petrochemicals group Sasol is taking its synthetic fuel technology global. With gas-to-liquid ventures up and running in Qatar and approaching fruition in Nigeria, the company is pursuing major coal-to-fuel opportunities in China, India and the United States.
Sasol, the world’s biggest producer of liquid fuel from coal, was the first company – way back in 1955 – to commercialise the Fischer-Tropsch method of converting coal to liquid fuel and chemicals. More recently, it started converting natural gas piped to South Africa from Mozambique, using a new technology based on the Fischer-Tropsch method.
Sasol’s plant in Secunda, Mpumalanga produces around 150 000 barrels of synthetic fuel a day, providing about 28% of South Africa’s annual fuel needs. It is the only commercial coal-to-liquid plant in the world – but that could change by as early as 2012.
Gas-to-liquid joint ventures
The company’s gas-to-liquid plant in Qatar – a joint venture with Chevron in partnership with Qatar Petroleum – started producing the world’s first commercial supplies of gas-derived fuel outside South Africa in 2006.
According to Business Report, a second Sasol Chevron plant, in Nigeria – in partnership with the Nigerian National Petroleum Company – is expected to start operating in 2009, and the joint venture partners are also conducting a feasibility study for a gas-to-liquids facility in Western Australia.
On the coal-to-liquid front, according to Business Report, Sasol has started feasibility studies for two plants in China which would produce a combined 160 000 barrels of fuel a day and could be in operation by as early as 2012.
The group is also eyeing coal-to-liquid opportunities in the three US states of Montana, Illinois and Wyoming, the newspaper reported last week, and has identified coal deposits in India that could support a coal-to-liquid plant.
“All three countries are engaged in discussions with Sasol, at different stages of advancement, with a view to developing coal-to-liquid plants that will lessen their dependence on oil imports,” Sasol chief executive Pat Davies said in the group’s 2006 annual report, released in November.
Sasol’s benchmark for an international coal-to-liquid plant, according to Business Report, is 80 000 barrels a day, requiring about 60 000 tons of coal a day and costing between US$5-billion and $7-billion to build.
With such high costs involved, Sasol is looking to the respective governments to provide suitable incentives, including loan guarantees, to make it possible for the company to secure finance for the plants.
Davies said in his annual report that Sasol was “very upbeat” about the prospects for the two planned plants in China.
He said the group foresaw “a rebirth in coal utilisation in some of the world’s coal-rich regions. This case is particularly strong in those countries that have insufficient or no oil reserves, such as Australia, India, China and the US.”
China, the US and India together hold a large part of the world’s coal reserves. According to Business Report, China’s reserves are estimated at one trillion tons, while Montana, Illinois and Wyoming together account for some 267-billion tons, about 56% of total US reserves.
Davies has said that processing just 10% of China’s coal reserves could produce as much liquid fuel equivalent as that produced from the world’s proven oil reserves.
And the world’s gas reserves, he said in his 2006 report, were estimated to have an oil equivalent of at least a trillion barrels, which “could meet human needs for at least another 60 years.”