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Joint Venture Plans Gas-to-Liquids Plant in Bolivia

Bolivia’s major natural gas fields are in the south; the proposed GTL plant would be in Santa Cruz, fed by a pipeline. Map: Petrobras.

Franklin Oil & Gas, Bolivia S.A. and YPFB (Yacimientos Petroliferos Fiscales Bolivianos, Bolivia’s state-owned oil company) have signed a new Memorandum of Understanding to build and to operate a Gas-To-Liquids (GTL) plant in the Grande River region of the Department of Santa Cruz, Bolivia.

Preliminary studies call for the Grande River plant’s design to produce approximately 10,000 barrels per day of Fischer-Tropsch diesel using GTL technology. By comparison, the Qatar Petroleum-Sasol Oryx GTL facility in Qatar, due to come online in June, will produce 34,000 barrels per day of liquids (24,000 barrels of diesel, 9,000 barrels of naphtha and 1,000 barrels of liquefied petroleum gas).

The MOU, signed on May 25, 2006, is in the name of Franklin Mining’s newly-formed subsidiary, a Bolivian corporation, and is in confirmation of an MOU signed prior to the nationalization of Bolivian gas fields on 1 May 2006.

Bolivia has the second-largest natural gas reserves in Latin America, behind Venezuela. The country currently is largely self-sufficient in oil, with consumption of an average 51,240 bpd in 2005, according to the US Energy Information Administration (EIA). Diesel is the only fuel Bolivia must import.

The joint venture partners assert that, when fully operational, the Grande River plant’s domestic marketing and distribution will begin eliminating Bolivia’s continued need to import diesel as well as providing product for export.

Franklin Oil & Gas, Bolivia S.A. will invest US$320 million in land acquisition and plant design and construction. An additional $40 million dollar investment will be provided when additional production capabilities are included. YPFB will provide the natural gas, access to all necessary labor resources and a domestic sales, marketing and distribution infrastructure.

Franklin Oil & Gas, Bolivia S.A. and YPFB will equally share the net profit from plant operations and sales, marketing and distribution of all products.

During the first half of 2005, Bolivia produced 1.4 billion cubic feet per day (Bcf/d) of natural gas, according to YPFB. More than 70% of the country’s production occurs in the Tarija department, which is south of the Sana Cruz department and on the border with Paraguay. Two natural gas fields, San Alberto and Sabalo, represent about one-half of Bolivia’s total production. (San Alberto is where Bolivian President Evo Morales announced the nationalization.) Up to the nationalization, Petrobras had been the number one producer, followed by Repsol-YPF.


Rafael Seidl

Let's hope the new president, Evo Morales, is smart enough not to renege on this joint venture. Outside investor really would stay away for a while if he did.

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