* Plant was studied for Montney shale gas production
* Talisman to focus on oil and liquids-rich gas assets
* Shares jump 4 percent in Toronto
CALGARY, Alberta, June 28 (Reuters) – Talisman Energy Inc
said on Thursday it decided not to develop a
multibillion-dollar gas-to-liquids project in British Columbia
with South Africa’s Sasol Ltd, saying it would
concentrate instead on drilling for oil and gas liquids as
natural gas markets stagnate.
Talisman, Canada’s fifth-largest independent oil explorer,
and Sasol had been studying for more than a year the potential
for such a venture to process gas from the Montney formation,
and had set mid-2012 as a target to make a decision.
Such plants convert low-value natural gas into diesel or
other fuels that command much higher prices. It is one of
several ideas put forward by companies with massive shale gas
reserves in North America facing depressed prices.
“Talisman’s immediate focus is to accelerate investment in
near-term liquids opportunities, with the goal of increasing
liquids and oil-linked gas production to 300,000 barrels a day
by 2015,” Talisman Chief Executive John Manzoni said in a
statement.
The decision to opt out of the proposed plant, which could
have cost as much as C$10 billion ($9.7 billion), came as no
surprise, said Michael Dunn, analyst with FirstEnergy Capital
Corp.
“We couldn’t figure out how they would go about funding it.
Subsequent to Sasol entering the deal with them, Sasol’s been
pursuing a Gulf Coast GTL project,” Dunn said. “I was not
assuming that both of those would go ahead at the same time and
my guess would be that the Gulf Coast one would be cheaper to
build.”
Continued…
