Syntroleum and Marathon Execute New Agreement for Coal to Liquids
18 January 2007
|Syntroleum’s FT reactor is indifferent to the source of syngas. Click to enlarge.|
Syntroleum Corporation and Marathon Oil Company have struck a new definitive license agreement that replaces the original Master Preferred License Agreement for Syntroleum’s gas-to-liquids (GTL) technology, and it establishes a limited master license for Syntroleum’s coal-to-liquids (CTL) technology.
This agreement allows Marathon Oil the non-exclusive right to use Syntroleum’s Fischer-Tropsch process to produce synthetic crude. Revenue to Syntroleum under this agreement would be in the form of royalties based upon actual production volumes from any licensed plants constructed and operated by Marathon.
As part of this agreement, Marathon terminated and discharged all of its rights under two promissory notes, in the amount of $21.3 million plus accumulated interest in the amount of $6.3 million, originally established in connection with the construction of Syntroleum’s Fischer-Tropsch Catoosa Demonstration Facility. Also, Syntroleum has agreed to pay Marathon two payments of $3 million each in December of 2008 and December of 2009.
In 2003, Marathon and Syntroleum Corporation opened a gas-to-liquids demonstration plant at the Port of Catoosa, near Tulsa, Oklahoma. The synthetic fuel was used in long-term testing and demonstration in buses, and recently in a blend with JP8 in a B52. (Earlier post.)
In June 2006, Syntroleum announced a joint project development agreement with Sustec Industries to develop a nominal 3,000 barrel per day (bpd) Syntroleum Fischer-Tropsch (FT) and Synfining unit as the first phase of a possible 20,000 bpd Coal to Liquids project at Sustec’s Schwarze Pumpe industrial facility at Spreetal, Germany.
The 3,000 bpd Spreetal CTL plant is the first project under the Sustec-Syntroleum joint venture announced in January 2006 that provides for exclusive joint business development of projects integrating Sustec’s gasification technology (from its Future Energy GmbH portfolio company) with Syntroleum’s Fischer-Tropsch (FT) technology. (Earlier post.)
In September 2006, Syntroleum announced the completion of the production of 100,000 gallons of Fischer-Tropsch aviation fuel for the military at the Catoosa Demonstration Facility and shut down the facility. (Earlier post.)
IPAA 2006 OGIS West (Syntroleum presentation)
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