Early this year, Syntroleum Corporation announced that the front-end engineering design has been completed with Tessag Industrie Anlagen GmbH, resulting in a price quote of $506 million for the engineering, procurement and construction of Syntroleum’s proposed 10,000-barrel per day Gas-To-Liquids (GTL) and specialty products plant in Western Australia, known as the Sweetwater project. The quote includes provision for expanded refining capabilities that will give the plant greater manufacturing flexibility and a wider range of products than originally contemplated. The quote does not include interest during construction and other owner’s costs, which include proprietary catalysts to be supplied by Syntroleum. These costs are yet to be finalized.
The Sweetwater project is a nominal 10,000-barrel per day plant that will employ the proprietary Syntroleum Process to convert natural gas into ultra-clean high-performance and sulfur-free synthetic specialty products such as lubricants, industrial fluids and paraffins, as well as synthetic transportation fuels. The plant will be located on the Burrup Peninsula in Western Australia. Syntroleum has signed a 20-year gas supply contract for the plant with North West Shelf Venture Partners. Merrill Lynch has been retained to assist Syntroleum with obtaining debt financing for the project.
In April Syntroleum announced that it has contracted with Clough-PGS Joint Venture to provide operating and maintenance services for the Sweetwater project. Clough-PGS is a joint venture between Clough Engineering Ltd., an Australian Company, which is part of Clough Ltd., and PGS Production Limited, a United Kingdom subsidiary of the Petroleum Geo-Services Group.
The 13-year agreement totals approximately A$350 million and calls for Clough-PGS to provide complete operating and maintenance services for the plant, from inlet flange for its natural gas feed through to the wharf facilities where the finished specialty products will be shipped to market.
Also in April Syntroleum said that it has signed multiple agreements with the Dampier Port Authority that provide Syntroleum access to the Dampier Port facilities and services for shipping products produced at its Sweetwater plant. The agreements are for a term of 30 years and cover usage of the existing port facilities at a fixed price, leasing of land and related easements.
The easement agreement provides right-of-way access on Dampier Port Authority land for laying and operating product pipelines from the Sweetwater plant to the port.
Meanwhile, Syntroleum and Norway’s Petroleum Geo-Services have agreed to form a joint venture to develop, market and operate mobile marine production facilities based on Syntroleum’s GTL technology.
The proposed joint venture will offer contract GTL services to convert otherwise stranded natural gas from off-shore fields into marketable hydrocarbon products.
Syntroleum, in association with United Kingdom-based AMEC, has been conducting engineering and design work for the floating systems for a number of months. The company said floating facilities will be useful for small associated gas fields, monetization of gas caps, short-term use as an early production system, and as a long-term solution for offshore gas in a range of water depths.
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