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Sasol Scouting US for Locations for $5-Billion Coal-to-Liquids Plant, Considering China Too

15 September 2005

Sasol_opportunities
Sasol global FT activities. Click to enlarge.

Executives from Sasol, the South African energy company and the world’s largest producer of synthetic fuels, are visiting Montana this weekend as they scout for potential sites for a $5-billion Coal-to-Liquids (CTL) plant, according to Congressman Denny Rehberg (R-MT). Other potential locations include Wyoming, Illinois and Alaska.

Montana Governor Brian Schweitzer is campaigning for the use of CTL as a solution to the country’s energy needs, and will be escorting the Sasol team to examine the coalfields in southeastern Montana.

I am leading this country in this desire and demand to convert coal into gasoline, diesel and aviation fuel. We can do it in Montana for $1 per gallon. We can do it cheaper than importing oil from the sheiks, dictators, rats and crooks that we’re bringing it from right now.

—Governor Schweitzer (Reuters)

According to Rehberg, Sasol’s CEO will come to Washington in a few weeks for further discussion, tax incentives and loan guarantees being a major enabler for such a project.

Sasol could also take equity stakes of up to 50% in two proposed Chinese coal-to-liquid (CTL) projects. (Business Report)

The company will decide whether to invest in the Chinese ventures based on the outcome of feasibility studies expected within two months.

The Chinese proposal is for two facilities producing 80,000 barrels of synthetics per day per site at Ningxia autonomous region and Shaanxi province, both in the coal-rich western part of China.

[Sasol CEO] Davies said both states were on a drive to stimulate industrial growth and he was confident attractive incentives would be offered to Sasol.

When asked the value of Sasol’s investment, he said: “We haven’t built a CTL plant since the late 1970s, so we’re having to obviously refine that technology. The cost numbers haven’t come in, and that’s why we must wait for the study.”

Analysts are pegging the threshold for the commercial viability of CTL technology at about US$35 per barrel of crude oil.

Sasol’s major focus is Gas-to-Liquids (GTL), and it is currently building major GTL facilities (Oryx in Qatar and Escravos in Nigeria) with plans to produce 540,000 barrels a day of synthetic fuels and chemicals by 2014.

However, the emerging market situation with crude oil is stimulating interest in countries with two of the largest coal reserves—China and the US—in CTL, and Sasol will not let that opportunity pass by.

The level of investment required in CTL projects is expected to exceed Sasol’s per barrel spending on gas-to-liquid (GTL) ventures because the coal gasification portion of the technology is more capital intensive.

Sasol, founded in 1950, has two primary Fischer-Tropsch technologies for the conversion of gassified coal or natural gas to fuel and chemicals.

The high temperature process, currently represented by the Advanced Synthol reactor, produces synthetic gasoline and light olefins. The low-temperature process, represented by the Sasol Slurry Phase reactor, produces mostly synthetic diesel.

Resources:

  • Sasol presentation at CSFB Global Oil and Gas Conference, June 2005

September 15, 2005 in Coal-to-Liquids (CTL) | Permalink | Comments (12) | TrackBack (0)

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Comments

It's as though Katrina never happened. If biofuels are 'clean' and petroleum fuel is 'dirty' then CTL is 'ultradirty'. Same goes for oil from tar sands and shale. We need to work out the direct + indirect CO2 emissions per gallon or litre of fossil solids based fuels. Thermal efficiency doesn't matter so much when there is a lot of coal but it does matter that even more CO2 is generated turning it into liquids. Does anybody have CO2 data for coal based vs petroleum based liquid fuels?

The coal to liquid idea is living in the past, when CO2 was ignored. This is not a good idea.
We need to use renewable sources of energy!
I am strongly for Biofuels.

Well, the greenhouse gas picture is going to vary based on the process (and the assumptions you plug in). However, one study from Princeton that looked at four different CTL processes concluded that the different mechanisms produced 1.45, 1.61, 1.72 and 1.86 times the GHG relative to the production of gasoline.

On the other hand, the same study also concluded that there is an opportunity for significant reductions in GHG production relative to gasoline when CTL is used to co-produce dimethyl ether as a fuel and electricity.

How something like the underground gasification/CTL process that Ergo, Linc and Syntroleum are working on affects GHG relative to conventional petroleum refining still needs to be determined, I think.

The low temperature Sasol Slurry Phase reactor feels like thermal depolymerisation. Are ther diferences?

Let's say the Princeton study concludes CTL is 50% more greenhouse intensive than petroleum fuels. With a carbon tax CTL could lose any initial price advantage. Suppose to give a break to biofuels costing $2 a litre that carbon tax is set at 50c on petroleum fuel costing $1.50. The carbon tax on CTL would be 75c so that it would have to cost $1.25 to make the $2 retail market price. These figures will keep changing as oil depletes and the tax rate adjusts to meet an overall CO2 target.

The whole notion of liquids from coal, tar sands and shale needs a long term view.

No, the slurry phase process is still a variant of the Fischer-Tropsch process. Thermal depolymerization is totally different.

Aussie:

Please do a bit more research on the topic of coal to liquid before you present your opinions on a technical forum such as this one.

The CTL from syngas process the Sasol proposes is much cleaner than any Diesel fuel in use today.

Opinions are wonderful things but do not present any data.

It is not the CTL fuel that is "dirty," it is the coal gasification process, at least as commercialized to date. See http://www.northernplains.org/documents/Fischer-Tropsch_Coal-to-diesel_10_05.pdf

In the long term, we are running out of petroleum......in the short term, we are being held hostage by foreign petroleum producers, and our economy is so fragile that any disruption of oil supply causes drastic consequences. Biofuels and other renewable energy alternatives are decades away from implementation....what shall we do in the meantime? CTL and oil from tar sands and shale are immediate solutions that can be implemented today. Reductions in GHG production take a back seat to the twin threats of economic catastrophe and weakened national security from oil shortages.

Has the CO2 issue with CTL been forgotten? Replying to the question about the CO2 intensity of CTL, it is all much worse than anyone is admitting.

The figure quoted is "about 2 - 3 times more CO2 intensive than refinery fuels on a full life cycle basis". The trick here is to add the CO2 produced when the, say, diesel, is used in a car ontop of the CO2 produced by a refinery and by CTL. Since a refinery only uses about 10% of the C in crude oil the comparison is "diluted" by the end use. If end use is 90 units, the refinery puts out 10 units of CO2 to produce the diesel while the CTL puts out between 110 and 210 units of CO2 (the 2 to 3 times). In my book, that makes CTL 11 to 21 times worse than a refinery. The reason is the poor thermal efficiency of the CTL process.

Another trick is to say that "anyways the CO2 from CTL is pure and therefore ready to be used in a carbon capture and storage (sequestration) project". This is only true for a fraction of the emissions. The CO2 from process is mostly pure (but at low pressure) while the CO2 from steam and power generation is not. At best, utilities are generated from gasification like an IGCC, but even there, capture is still an additional investment that no current projects envisage.

So to summarize, the CTL produces between 10 and 20 times as much CO2 as a refinery, and about half of that MAY be dealt with, so CTL with CCS will, very roughly, produce between 5 and 10 times as much CO2 to get a liter of diesel to the pump. Not brilliant.

THOSE OF US WHOM ACCEPT THE CO2 THEORY REGARDING CLIMATE CHANGE(YES, YOU-"ADVOCATE"), APPARRENTLY ARE WILLING TO CONFUSE POLITICAL SCIENCE FOR THE CHEMICAL REALITIES OF "TRUE SCIENCE". QUESTION: SINCE CO2 REQUIRES COMBINING CARBON ATOMS WITH FREE OXEGEN ATOMS, SHOULD WE THEN EXPECT THAT THE PROPORTIONS OF OUR ATMOSPHERE'S CONSTITUENT GASSES REFLECT DIMINISHED FREE OXEGEN, MEASURED @ 20.6%? OF COURSE, POLITICAL REALITY DOES NOT CONSIDER THIS SMALL DETAIL. NOW, IF THE PROPOGANDA EVOLVES TO ADD THIS ARGUMENT, THE EMOTIONAL RESPONSE WOULD REALLY BE FUN TO WATCH, AND WOULD FURTHER OVERWHELM A TRUE SCIENTIFIC UNDERSTANDING. PERHAPS "ADVOCATE" THINKS THAT THE LONGER WATER IS BOILED, THAT THE BOILING WATER IS AT A HIGHER TEMPERATURE? THE ONE-SIDED DISCUSSION SEEMS LAME TO ME. THE HIGHEST TEMPERATURES RECORDED IN NORTH AMERICA OCCURRED IN THE "DUST BOWL" YEARS OF THE 1930'S-WELL BEFORE THE POLITICAL SCIENCE LINKED-UP WITH HOLLYWOOD CINEMATOGRAPHERS TO PRODUCE GORE'S IMPORTANT WORK. AS A TRAINED ENGINEER FAMILIAR WITH COMBUSTION REACTIONS, IT'S DISHEARTENING TO REFLECT THAT FREE THINKING PEOPLE LITERALLY "BUY INTO" THE CO2 ASSUMPTION. WHAT ARROGANCE!

I believe that the underground coal gasification can the best solution for sasol, as i know that sasol technology based in gasification process where as eskom take look at the more than 75% of energy from coal for combustion. I also believe that sasol can benefit more from these application as from a little knowledge that i have, show me that sasol look at the separation of gas for they fuel product not full combustion of coal like eskom.

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