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Syntroleum and Marathon Execute New Agreement for Coal to Liquids

18 January 2007

Syntroleumproc
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.)

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January 18, 2007 in Coal-to-Liquids (CTL) | Permalink | Comments (8) | TrackBack (0)

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Comments

What does coal to liquids have to do with green cars?

My understanding of what qualifies as a "green car" is anything that has a smaller greenhouse footprint or less local pollution.

CtL may provide lower gas prices and an improvement in US fuel independence (since we have huge stores of coal), but these are not green concerns.

If fact, some would claim that it heads in the opposite direction, since the system efficieny is probably lower, increasing the greenhouse footprint and leads to greater enviro impact b/c of the way coal is mined and b/c of sulfer content of coal being released and causing acid rain.

Am I missing something?

I agree, coal to liquids is not a green technology.

It's not strictly green, no.

However, the reason *I* come to GCC is that I am interested in efforts to move away from conventional oil. Obviously, I prefer technologies that are green to those that aren't, but at this stage I'll take anything I can get. For me, articles like this are an important part of why I come here, and I hope to see them continue.

Matthew,
There is also another plus, where CTL and GTL plants built can be retrofitted for BTL operation. Although not cheap, it would cost far less to convert, than to build from scratch.

What does coal to liquids have to do with green cars?

It could be green, if you sequester the excess CO2 at the production site, and have a scheme for pulling CO2 (from combustion of the liquid fuel) from the atmosphere. The latter is a very challenging task, but it may be that in a carbon-constrained world that hydrocarbon fuels will remain the fuel of choice for some applications (such as, aircraft) even if they have to pay the cost of doing that.

As for BTL: one could also argue with its 'green-ness' when one considers how much land it's going to have to take up. Is a rain forest converted to an energy plantation really 'green'?

Matthew, I'm right on board with you. I read this blog and a few others because of the importance of energy independence. When one considers all the geopolitical connections that happen because of the current energy reliance on countries that are corrupt (Iran, etc) or borderline communist (Venezuala), energy independence is in my opinion a more immediate concern than global warming worries.

The causes for global warming are still debateable (the sun is currently hotter- ice caps on Mars are melting for example. I think human activity plays a role, but very small when you look at the whole picture) however the extreme need for energy independence is not even debateable. It is absolutely necessary. Countries like Iran can't throw their weight around as much then. They therefore can't cause instability in the world economy and the US doesn't have to so actively police the world.

As long as govts soon stop promoting ethanol (wasteful and inefficient) as the savior to energy concerns, the free market should work well to eventually bring about significant change. If govts want to get behind something useful, biodiesel is a much better focus.

the sun is currently hotter- ice caps on Mars are melting for example.

Increased solar output does not explain observed warming on Earth. If the sun were responsible, the stratosphere would be warming also. But the stratosphere is cooling, as predicted by models in which the warming is due to increase in greenhouse gases. The latitude variation in warming (more at the poles) is also inconsistent with solar forcing.

The climate on Mars is strongly affected by dust storms, so changes in their intensity or frequency can cause ice caps to change in size. Or so I understand.

Maybe I was born a skeptic but even if this replaces some of the petroleum that we use, will the byproduct be sold to the highest bidder like China and not where it is needed right here? The green won't be in the product but in the pockets of big corporations.

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