Abstract.

After decades of intensive development and, more recently, successful operation of three commercial-scale plants, gas-to-liquids (GTL) technology is technically ready and economically viable for large-scale commercial application. At production capacities of 50,000 barrels per day, in locations with low gas and construction costs, and at long-term oil prices of $20 per barrel or higher, GTL offers an attractive option for the monetization of natural gas reserves. Given the large volume of gas held in undeveloped reserves worldwide, GTL deserves serious consideration from all the potential players: oil and gas companies, governments, process technology companies, engineering firms, auto makers, and the investment community. Since the high-profile announcements from its developers brought GTL to the forefront in 1997, GTL technology has already captured the interest of many companies. However, until now no ground was broken for new commercial plant construction. In this paper, we discuss how recent developments in technology and changes gas and product markets have affected the economic viability of GTL technology. We conclude that on balance the prospects for GTL are better now than two years ago demonstration plants, and commercial GTL project feasibility studies. Since 1998 about half a dozen additional players have entered BACKGROUND and re-entered the GTL field, including major oil companies and small technology development companies. After decades of intensive development and, more recently, technically successful operation of three commercial-scale plants, gas-to- Nevertheless, no ground has been broken liquids (GTL) technology received a flurry of yet for new commercial GTL projects. Shell attention in 1997 and 1998. This attention was has almost completed reconstruction of its the result of a series of high-profile Bintulu facility, which it plans to restart within announcements in which key developers the next month with a production capacity declared GTL technically ready and increased to twenty thousand barrels per day economically viable. Based on a detailed study (up from about twelve thousand). A variety of of GTL technologies economics, and product pilot plant and research and development markets we concluded that at production projects are also under way, such as the capacities of 50,000 barrels per day (50 MBD), Syntroleum / ARCO pilot plant at Cherry in locations with low gas and construction Point. However, despite the numerous costs, and at long-term oil prices of ﹩20 per announcements of commercial projects, none barrel or higher (Brent), GTL offers an have proceeded beyond the pre-feasibility or attractive option for the monetization of feasibility study stage. Even projects that were natural gas reserves. Given the large volume of slated to be under construction in 1999 or gas held in undeveloped reserves worldwide,

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