Sasol Say It’s Considering Building First Ever Gas-to-Liquids Plant in U.S

Sasol Ltd. (SOL), the world’s largest producer of motor fuel from coal, said it’s considering building what it says will be the first gas-to-liquids plant in the U.S.

The Johannesburg-based company may build either a 2 million metric ton per year or 4 million ton plant at Calcasieu Parish, Louisiana, it said in an e-mailed statement today.

“We believe Sasol’s proprietary GTL technology can help unlock the potential of Louisiana’s clean and abundant natural- gas resources,” Sasol said. The feasibility study will take about 18 months to complete, it said.

Sasol, which uses proprietary technology to make jet fuel, gasoline and diesel, is shifting production away from South African coal to natural gas overseas to help counter the effect of a strengthening local currency and as carbon-emissions rules make coal less attractive.

Source: Bloomberg

Shale Gas: Economic Potential vs Status Quo

More than a year ago we indicated the potential of natural gas extracted from shale rock and that the SA Karoo basin covered in shale rock might contain a great deal of this new source of energy. In a report in the Calgary Herald, of 18 April, Peter Terzakian referred to a very recent assessment of shale gas potential in 48 basins in 32 countries released by the US Energy Information Agency. (Read his article here)

To quote the Calgary Herald: “ The numbers are staggering: over a six-fold increase in the 1,001 trillion cubic feet (Tcf) of natural gas that was previously known to be “proven” reserves. According to the EIA report, over 6,600 Tcf of shale gas resources are estimated to be technically recoverable”. As the Calgary Herald explains “……..To put this in perspective, 1,000 Tcf of natural gas contains the equivalent energy to 166 billion barrels of oil – a staggering amount considering that the discovery of 10 billion barrels of conventional oil these days is a rare occurrence….”

We might add by way of comparison that the annual global consumption of oil is of the order of 87m barrels per day of which SA consumes about approximately 555 000 barrels per day.

The Calgary Herald produced a table of the largest 15 such shale gas reserves to point to the vast recoverable resource in China. But as may be seen below the estimate of the technically recoverable resource in South Africa at 500 TCF (none yet proven) is no small potatoes either- it is the fifth largest such resource and equivalent to 83 billion barrels.

Were this potential output of natural gas, estimated as recoverable by the US EIA, to be captured from the Karoo shale it would be very large potatoes indeed. It would be the equivalent to about 400 years of SA consumption of oil at current rates: 365*550 00 = 202.575m per annum; (83000mb/202.575mbpa) = 402 years

These numbers derived from estimates that are as objective and scientific as any should help concentrate minds at the SA Department of Mineral Resources that has placed a freeze on rights to explore for natural gas in SA until it has formulated a policy. The benefits of discoveries of natural gas in SA of anything like this order of magnitude would very obviously be transformational for the SA economy. It would offer the prospect of much faster growth in national output and in incomes, including the incomes to be received by the SA government and of the poor to whom it may be hoped a good portion of the extra income would be distributed.

There might well be damage to the environment to be traded off for these great potential benefits. Such tradeoffs can presumably be calculated and compensation offered if necessary to those negatively affected. There is too much at stake for any other approach to be adopted.

How much actual damage to be caused will continue to be disputed. However what should be borne in mind is that the damage to the environment caused by extracting other sources of energy in SA especially open cast or even deep level coal mining, would need to be brought into the calculation. Or in other words, less damage to the Waterberg traded off for damage to the Karoo.

In many countries the prospects of shale gas have been greeted like the proverbial manna from heaven. Technically recoverable gas is being converted into proven reserves and actual output at a rapid rate. The economics of shale gas are rapidly transforming the energy equation in the US. But in SA the green movement seemed to have sounded an alarm that has deafened any account of the potential benefits. That the Karoo farmers have (recently) been denied any direct benefits from the gas under their land has no doubt added to the cacophony of protest.

Shell Oil, which appears to be well ahead in the race for Karoo gas, has argued (Business Report May 3 2011 p 17) to the contrary, that the process of extracting gas from shale “can be done without significant environmental damage”. That Shell has an interest in such arguments does not make the argument invalid. Furthermore the actual experience of damage to the environment in shale basins where gas is already being extracted in significant volumes will provide very important evidence.

The negative external effects of extraction or of any minerals in the ground do not remove the necessity to actually calculate the relevant tradeoffs as best as science will allow. Without such calculations and tradeoffs, economic development itself becomes much more difficult to realize. This is a fact of economic life well enough known to the greens who have no taste for the rising incomes and especially the rising consumption power of the masses.

Such an environmental assessment would then enable full compensation to be actually paid out to those damaged directly. The great potential extra income to be generated from natural gas available deep under the Karoo shale rock is very likely to greatly exceed the damage caused to neighbors. If this is not the case then the project should not be allowed to go ahead.

The Department of Mineral Resources should however be well aware when establishing its policy that not only will natural gas discoveries on this potential scale be transformational for the SA economy, it will prove even more transforming of the energy sector of the economy. The Department should know that transformation of this order of magnitude will naturally not only be resisted by those directly in the path of discovery. Resistance would also come from those who think they may lose the race for supremacy for natural gas from SA sources because they have been slow out the blocks. The national interest in economic growth will count for little when opposed by vested interests.

Source: Investec

See also: An incredibly bullish chart on Shale Gas Reserves, Sasol to explore Karoo for Shale Gas, and Sasol buys more Canadian Shale

Sasol pushes LPG, "green" taxis

JOHANNESBURG — In an effort to reduce carbon emissions, the Gauteng provincial government and the South African National Taxi Association Council (Santaco) have embarked on a partnership to convert minibus taxis in the province to dually operate on liquefied petroleum gas (LPG) as well as petrol.

Changing from petrol to gas and vice versa is manually done by the driver.

On the Gerotek high-speed oval, I could discern no visible power difference in performance as a passenger. Tests have shown a minimal difference in power output.

The R3m pilot project which was facilitated by one of Blue IQ’s automotive subsidiaries, the Automotive Industry Development Centre (AIDC), has converted 70 taxis operating in northern Pretoria and Tembisa.

Each conversion costs about R20000, paid for by the Gauteng provincial government. Each conversion takes about 24 hours and the driver/owner was compensated for loss of income for this period.

It was not revealed what this figure is.

Strategic relationships were established with Santaco and the South African National Energy Research Institute (Saneri).

In addition, Sasol was brought on board due to their intensive LPG programme in SA.

After a robust vehicle selection process, seventy mini-bus taxis were converted to operate dually on petrol as well as LPG over a 3 month period.

An LPG vehicle conversion specialist was appointed to conduct the conversion process, using the latest generation conversion kits, which were imported from Germany. The vehicle of choice was the Toyota Quantum. Only one type of vehicle was chosen to keep the conversions constant. It was decided to place the donut-shaped gas tank in the spare wheel well.

The project findings show an 11% reduction on the carbon dioxide (CO2) levels when switching the vehicles to LPG.

Carbon monoxide can be deadly.

Technical tests on a prototype mini-bus — sponsored by Sasol — were conducted to precisely assess the effect on carbon emissions as well as its fuel efficiency. The AIDC commissioned these tests at both the Gerotek Test Facilities in Pretoria and the SABS Laboratories in East London. The tests, the first of their kind in SA, showed that although the overall fuel consumption is higher on LPG, the lower cost of LPG balances out the effect of fuel costs for the minibus taxi driver. The cost benefits also include improved longevity of the engine and a reduction of overall maintenance costs over the lifespan of the vehicle. It is estimated that more than 100000km, which taxis can do in a 12-month period, the savings to the driver/owner would be in the region of R20 000.

Sasol erected a temporary refuelling point at Gerotek for the tests, with more permanent ones at Kruisfontein and Spartan. There is a further temporary one at Rosslyn.

The AIDC plans to roll out a second wave of 150 converted minibus taxis during the next 12 months. In light of this target, we can easily expect the sprouting of additional LPG refueling stations across Gauteng to support this growing fleet of "green" minibus taxis.

Sasol buys more Canadian shale gas assets

South African energy group Sasol [JSE:SOL] said on Tuesday it would pay $1.08bn for its second shale gas interest in Canada, in a move to expand its gas portfolio.

Sasol said it would buy a 50% stake in Talisman Energy's Cypress A acreage in the Montney Basin in Canada, where the company also bought a stake in Talisman's Farrell Creek assets last year.

The 57 000 acres of land covered by Cypress A represent an estimated contingent resource of 11.2 trillion cubic feet (tcf) of gas.

Sasol will pay an initial C$263m in cash, with the remaining C$787m in future development costs.

Sasol and Talisman are studying the possibility of establishing a gas-to-liquids plant in Canada. Sasol said the acquisition could allow for a scalability of the proposed plant.

See also: Prospecting for gas in the Karoo

Sasol leads the way with synthetic jet fuel

SASOL, South Africa’s global, oil-from –coal pioneer, scored a major triumph at the AAD 2010 exhibition at the Ysterplaat Air Force Base, Cape Town, recently when the world’s first flights using its internationally approved, fully synthetic jet fuel, landed there soon after the gates to the exhibition area had opened.

The landmark flights to Ysterplaat took off a few hours earlier from both Lanseria International Airport, near Johannesburg, and Kruger Mpumalanga International Airport, Nelspruit.

Involved in the historic operation were three National Airways Corporation turbine-powered aircraft-the flagship Hawker 4000 corporate jet, atop-of-the-range Beech craft King Air 350i and a PAC750 equipped with a state-of-the-art airborne surveillance system-and a chartered Boeing 737-200,all of which were the first aircraft to use Sasol’s 100% Synthetic Jet A-1.

This is the only fully synthetic fuel that is a true “drop-in” replacement for conventional jet fuel that is approved for commercial use in all types of turbine aircraft around the world. The Jet A-1 fuel that was used is made using Sasol’s proprietary Fischer-Tropsch technology that produces liquid fuel from coal at its Synfuels production plant in Secunda, South Africa.

Although the 100% synthetic Jet A-1 fuel is not yet commercially available, Sasol has supplied jet fuel since 1999 that is a 50:50 blend of synthetic and conventional ,crude-oil-derived JetA-1 fuel to the country’s main gateway, the OR Tambo International Airport, near Johannesburg.

The flights to the AAD exhibition using the 100% synthetic jet fuel were the culmination of a complex process that resulted in Sasol receiving the worlds first formal approval of a fully synthetic jet fuel published in Issue 6 of the Defence Standard 91-91 in April 2008, followed soon after by the inclusion in the USA jet fuel specification ASTM D1655.

Sasol is an integrated energy and chemicals company operating predominantly in South Africa ,where its history dates back to its establishment in 1950.Sasol currently has operations in 38 countries, employs about 34000 people, and is listed on both the Johannesburg and New York stock exchanges.

Technology is core to Sasol and, through its proprietary Fischer-Tropsch (FT) technology; Sasol converts coal and natural gas into liquid fuels, fuel components and chemicals. Sasol has chemical manufacturing and marketing operations in South Africa, Europe, Asia, and the Americas, and it mines coal in South Africa, extracts gas in Mozambique and oil in Gabon.

Pioneering Alternative Jet Fuels

Although Sasol focused primarily on the production of chemicals, road transportation fuels and the jet fuel from crude oil in the first four decades of its existence, a prediction in the mid-1990s of an imminent shortage of jet fuel at what is now the OR Tambo International Airport prompted Sasol to investigate opportunities for the production and qualification of synthetic jet fuel.

Road transportation fuels specifications are allowed to vary from one region to another, but the development of a viable alternative fuel for aviation application requires a drop-in replacement fuel with global acceptance and approval by all the international stakeholders.

In June 1996, Sasol embarked on discussions with international specification authorities, including the American Society for Testing and Materials(ASTM) and the British Ministry of Defence (UK MoD) .Between 1996 and 1998 ,Sasol conducted extensive laboratory and engine test work in South Africa and the USA to gain understanding ,acceptance, and demonstration of the use of an FT-derived synthetic jet fuel component up to a maximum of 50 volume percentage when blended with crude oil-derived jet fuel.

In April 1998, Sasol became the first company in the world to gain approval for the commercial use of a synthetic jet fuel component at up to 50% in a blend with petroleum kerosene as Jet A-1 .This approval for the use of iso-paraffinic kerosene (IPK), produced by the Sasol Synfuels facility in Secunda, was written into the UK MoDs Defence Standard (DEFSTAN 91-91),Issue 3.On February22,1999,Sasol made history by certifying the first batch of Sasol semi-synthetic jet fuel at the Natref refinery in Sasolburg, and since then, most aircraft leaving OT Tambo International Airport have flown on Sasol’s semi-synthetic jet fuel.

100% Synthetic Jet Fuel

Between 2001 and 2007, Sasol continued with extensive test work on blends of potential jet fuel streams from its synfuels facility with the aim of gaining official qualification of a fully synthetic jet fuel. In support of this objective, the prestigious Southwest Research Institute (SWRI) in San Antonio, Texas, was commissioned and a joint research report was submitted to the UK MoD in December 2003 with a request to approve the use of fully synthetic jet fuel as a commercial aviation turbine fuel.

The major engine manufacturers required further engine tests, including an endurance test on a Pratt & Whitney JT-9D engine, to be performed before final approval could be given. The 250-hour endurance test, conducted in February 2006 at the engine overhaul facilities of South African Airways in Johannesburg, necessitated the special production of 1, 2-million litres of synthetic jet fuel in Secunda.

Finally, in April 2008, the formal approval of Sasol fully synthetic jet fuel from the Synfuels plant in Secunda was published in Issue 6 of the Defence Standard 91-91.

Following shortly afterwards, Sasol’s fully synthetic jet fuel was also included in the USA jet fuel specification, ASTM D1655.Sasols 100% synthetic Jet A-1 from Synfuels was thus approved for commercial use in all types of turbine aircraft in the USA (ASTM D1655) and the rest of the world (DEFSTAN 91-91), and it remains on this day the only fully synthetic fuel that is a true drop-in replacement for conventional jet fuel.

The fuel is fully fungible and aligned with the current aviation infrastructure .It is compatible with existing jet engine requirements and can be used with conventional crude oil-derived jet fuelling systems.

Synthetic Jet A-1 Production

Sasol Synfuels is based in Secunda where it operates the world’s only commercial, coal-based, synthetic fuels manufacturing facility. A high temperature Fischer-Tropsch (HTFT) process, utilizing the unique Sasol Advanced Synthol technology, converts low-grade coal into fuel (LPG, petrol, kerosene and diesel) as well as chemicals .The coal-to-liquids (CTL) plant in Secunda produces approximately 160000 barrels per day of FischerTropsch Products.

This facility uses the Sasol, fixed bed, dry bottom (FBDB) gasification process to convert the coal into synthesis gas. The Fischer-Tropsch process is catalyzed, chemical reaction in which the synthesis gas, a mixture of carbon monoxide and hydrogen, is converted into liquid hydrocarbons of various forms (synthetic fuel).

The Fischer-Tropsch process can proceed through low temperature fischer-Tropsch (LTFT) or HTFT technology, with the main differences between the two processes being the operation parameters, reactor type, product spectrum and catalyst type.

The range of possible feed materials for the Sasol Fischer-Tropsch synthesis process are firstly, coal (coal-to-liquids, CTL), secondly, natural gas (gas-to-liquids, GTL) or biomass (biomass-to-liquids, BTL).These feed stocks can also be used in combination as is done at the Synfuels’ plant in Secunda where coal and natural; gas have been used together as feedstock since 2003 when pipeline bringing natural gas from Mozambique to Secunda was commissioned.

Five separate hydrocarbon streams in the Synfuels complex, as stipulated in Issue 6 of DEFSTAN 91-91, have been qualified for use in blending 100% Synthetic Jet A-1 .The product that was used in the first demonstration flights last month was blended from two of these streams. These were iso-paraffinic kerosene, which is also used routinely in the semi-synthetic blends supplied to the OR Tambo International Airport, and an aromatics-containing stream derived from severely hydro-treated coal tar kerosene.

It is the latter stream that contributes the required minimum of 8% aromatics and provides the high density and elastomeric seal swell properties to make the synthetic jet A-1 seamlessly compatible with conventional crude oil-derived jet A-1 . A part from the clean-burning nature of the synthetic jet fuel, leading to lower emissions than from conventional Jet A-1, the synthetic product has been shown to contain significantly better thermal and oxidative stability properties than normal jet fuels. This could enable the development of more efficient engines, running at higher temperatures than at present.

Alternative Jet Fuel Developments

Based on the two pioneering Sasol-specific synthetic jet fuel international approvals mentioned above, and with the worldwide drive to qualify alternative jet fuel for commercial use, the need for a generic approval protocol and specification for alternative jet fuel was identified by the aviation community.

The approval process and qualification protocol that was developed by the industry during Sasol’s seven-year quest to qualify 100% synthetic jet fuel became the benchmark for any future alternative fuel. It was subsequently formalized and adopted by the ASTM as specification D4054 “Standard Practice for Qualification and Approval of New Aviation Turbine Fuels and Fuel Additives”.

During the first generic approval process, five blends of individual Fischer-Tropsch-derived synthetic paraffinic kerosenes, blended with crude oil derived jet A, Jet A-1 or JP-8 fuel to produce semi-synthetic jet fuel, were evaluated. Sasol provided three of the synthetic kerosene samples while the other synthetic products were provided by Shell and Syntroleum.

A report prepared for the coordination Research Council in September 2008 concluded that semi-synthetic jet fuel containing up to a maximum of 50% volume of synthetic paraffinic kerosene derived from synthesis gas via the FT processes, complying with specified properties, would be fit for purpose. This was further validated by eleven years of commercial operation on Sasol semi-synthetic jet fuel using its iso-paraffinic kerosene.

In September 2009, a new ASTM specification D7566 (aviation turbine fuel containing synthesized hydrocarbons) was approved. This means that synthetic, FT-derived jet fuel component from any CTL or GTL plant can be blended up to a maximum of 50% of volume in crude oil derived jet fuel-this marked the first generic approval for a jet fuel component, independent of the production facility, based on the Sasol-developed protocol.

Looking Ahead

Sasol has actively participated in changing the jet fuel landscape and pioneering the way for the approval and use of viable alternative fuels. This also opened up opportunities for Sasol to include kerosene in its product offering to the international market from future GTL and CTL Plants.

The approval of synthetic jet fuel without aromatics, as is the case with LTFT jet fuel, is under investigation by the international aircraft industry, and Sasol is part of this initiative. The challenge is the legacy aircraft still in use that need aromatics to ensure elastomeric seal swell, thereby enabling the proper functioning of fuel system.

New and future aircraft are designed to handle fuel without aromatics. The generic qualification of synthesized aromatics as a jet fuel component is currently being pursued to enable fully synthetic LTFT jet fuel in the interim.

A further aspect that is currently receiving more and more research focus is the development of pathways to increase the renewable carbon content of jet fuels, in order to help the aviation industry with the reduction of its carbon footprint.

Given the pioneering role that Sasol has played thus far in alternative aviation fuels and with an increased international focus on all synthetic jet fuels including FT-based synthetic Jet Fuels, this aviation fuels area is exciting place to be.

Source

Sasol Flies First Synthetic Fuel Plane

Sasol flew the world's first passenger aircraft using the company's own developed and internationally approved fully synthetic jet fuel, it said yesterday.

"The fuel, produced by the Sasol proprietary coal to liquid process, is the world's only fully synthetic jet fuel to have received international approval as a commercial aviation turbine fuel," it said.

The flight went from Johannesburg to Cape Town. Sasol said the approval process was stringent as the fuel had to meet with the strict specifications of global aviation authorities making the country a pioneer in green technology.

Sasol: Potentially the Largest Foreign Single Project Investor in China

South African petrochemicals company Sasol expects China’s National Development and Reform Commission to conclude a review of its application to build a 90 000-bl/d coal-to-liquids (CTL) facility in that country soon.

Sasol entered into a 50:50 venture with Shenhua Ningxia to develop the $10-billion project, which is said to be the largest foreign single project direct investment in China and also the country's largest-ever CTL fuels project.

The CTL plant would be Sasol's first CTL investment outside South Africa, where the technology is used to produce about 40% of the country's fuel.

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