With recent oil price escalation, declining oil reserves and global warming, interest has been shown world-wide in the production of clean liquid fuels through Fischer-Tropsch (FT) Synthesis. FT Synthesis is a proven technology but development of commercial GTL has been very slow. For resource holders, the major challenge is economics thus, the economic viability of GTL calls for critical analysis.

This paper reviewed FT process and investigated its economics with principal interest in the production of Syncrude, DME and Methanol in Nigeria. A sound appraisal technique was later used to measure and rank GTL proposals with the LNG in Nigeria.

The results show that GTL-Diesel would be economically feasible when applied to a typical offshore Niger Delta resource at oil prices of above US$35/bbl and feedstock gas price in range of US$0.25-1.5/mmBtu. GTL-DME economics looks encouraging and could be introduced at a price lower than that of LPG. However GTL-Methanol will only be viable at a distress gas price of US$0.25-0.5/mmBtu and in a condition of preferential tax treatment. LNG and GTL-Syncude have the same value at discount rate of 16.84% with LNG giving higher profits if the cost of capital is less than 16.84%. The profitability of LNG and GTL (Syncrude and DME) is very close, with GTL having a potential superior return at high oil prices and preferable under conditions of limited capital. In Nigeria, GTL-Syncrude could be used to monetize "leftover" gas that doesn't merit a standalone new LNG train and provide the country an opportunity to enjoy direct exposure to oil price upsides.

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