US holds key to Sasol GTL plans

South Africa’s Sasol, the world’s largest producer of motor fuels from coal, is continuing its step-by-step progress towards a gas-to-liquids facility in Alberta, while using its planned GTL project in Louisiana as a guide.

Martin Waterhouse, president of Sasol’s Canadian unit, said he is counting on Alberta government approval late this year once an environmental impact assessment has been completed.

He cautioned that Sasol’s overriding challenge is to “manage capital costs” of a facility that is designed to produce 96,000 barrels per day, utilizing 1 billion cubic feet per day of gas which Sasol had hoped to obtain from Talisman Energy under a tentative C$1.05 billion deal more than three years ago.

However, Talisman sold part of the unconventional gas assets in the Farrell Creek and Cypress areas of British Columbia’s Montney formation, where shale gas in place is estimated at 9.6 trillion cubic feet, to Progress Energy Canada.

Waterhouse said Sasol is holding discussions with Progress as the new upstream operator.

Meanwhile, Sasol has acquired a 1,300-acre site for a GTL plant near Edmonton.

The company said last year that it was working on front-end engineering and design for its proposed GTL facility at Lake Charles, La., that is also targeted to produce 96,000 bpd of GTL and is expected to cost $11 billion-$14 billion, with an onstream date in 2018.

Waterhouse insisted Sasol is serious about its Alberta plans, but will “closely” track the U.S. developments.

—Gary Park