By Jeffrey Jones
CALGARY, Alberta, Sept 13 (Reuters) – Sasol Ltd is
a step closer to building Canada’s first multibillion-dollar
plant to convert cheap natural gas to diesel and other fuels
after the South African company signed an option on an
industrial property near Edmonton, Alberta.
Sasol, a new entrant into the Canadian energy sector, has
secured a site in Fort Saskatchewan, Alberta, drawn by the
region’s extensive infrastructure for both natural gas and
refined products, Rudi Heydenrich, president of new business
development for Sasol Canada, said on Thursday.
Total SA had previously planned to build an oil
sands upgrader on the property, which is in a region known as
the Industrial Heartland.
The gas-to-liquids operation, which would ultimately have a
capacity of 96,000 barrels a day, would be a welcome and sizable
new customer for Canadian gas producers whose finances are under
pressure from weak North American prices due to booming shale
supplies that have flooded the continent.
Such a plant would use about 1 billion cubic feet a day of
gas, about 8 percent of Alberta’s current gas output.
Analysts have pegged the cost of a plant as high as C$10
billion ($10.3 billion), though Heydenrich said Sasol has not
yet advanced the plan to the point where it could estimate
costs.
It has just completed the feasibility study and is now
beginning front-end engineering design for the plant, which
would likely have an initial capacity of 48,000 bpd. Following
that, the company would make a go-ahead decision and the
facility could be in service around the end of the decade.
Profitability for a GTL operation is based on a wide spread
between crude oil and natural gas prices, rather than a ceiling
price for gas, Heydenrich said.
Continued…
