Sasol’s Plan For North American Shale Gas: Turn It Into Diesel

[phantom power]

Davies says that with oil around $105 a barrel and natural gas at $4 per million BTU, markets are saying that one unit of energy from oil is worth more than four times the same energy from gas (given 5.8 mmBTU per oil barrel). “Given this current arbitrage our process is very effective,” said Davies in an interview with Forbes.

...

Now Sasol is in the earliest stages of envisioning the first gas-to-liquids plant in North America — one that would take advantage of the prodigous reserves of shale gas.

In December Sasol agreed to pay $1 billion to Talisman Energy for a 50% stake in its Montney Shale play in British Columbia, Canada. The companies expanded their Montney deal in March.

“Canada is a new play for us; it’s a real value proposition,” says Davies. “Given the structural change in the gas market, gas is likely to stay low. We provide a way of soaking up the excess gas and making money at it.” If that spread between oil and gas prices stays wide, Sasol would make good money turning nat gas into diesel. If oil collapses, Davies says Sasol could still make its “hurdle rate” just selling the gas into a pipeline network.

http://blogs.forbes.com/christopherhelman/2011/04/18/sasols-plan-for-north-american-shale-gas-turn-it-into-diesel/

[Nihil]

1. It's just amazing isn't it?

Start off with a "product" that has such an abyssmal environmental record
and then find a way to make it worse ...

> "We provide a way of soaking up the excess gas and making money at it."

"excess"? :wtf:


A Chicxulub visitor just can't come too soon ...

:mad:

[phantom power]

2. Yeah, what is this "excess" NG, just sitting around unused?

:crazy:

[NickB79]

3. It does solve the transportation problems associated with LNG

It circumvents the problems of specialized LNG tankers and port facilities required to move nat. gas across the ocean for export.

It does fuck-all for the environmental problems associated with fracking, though.