Houston, 14 September (Argus) — South African integrated energy and chemicals company Sasol has obtained an option to acquire a site for a proposed gas-to-liquids (GTL) facility in Alberta, Canada, after the company and Canadian independent Talisman Energy dropped plans earlier this year to jointly develop such a facility.
The site is in Strathcona County near Edmonton, in Canada's largest hydrocarbon processing region. The proposed GTL plant aims to exploit the sustained price discounts for North American natural gas compared with petroleum products markets in recent years as unconventional natural gas production has boomed.
The project, which would be the first of its kind in Canada, would convert natural gas into high-quality transportation fuels and petrochemical feedstocks, including diesel and naphtha.
GTL-derived diesel is cleaner burning than conventional diesel, with virtually no sulfur or aromatic compounds, according to Sasol.
“Alberta's industrial heartland is an ideal location for a GTL plant,” Rudi Heydenrich, president for new business development at the company's Canadian division, said this week. “We have found a site where the location, in combination with access and existing infrastructure, creates an excellent platform on which to build a GTL facility.”
The chosen site has already been designated for industrial use. The proposed project area covers 1,299 acres in Strathcona County, and is 2.5 miles (4km) northeast of the city of Fort Saskatchewan.
The project, dubbed Canada GTL, is in the feasibility stage. The company expects to reach a final decision by the end of 2012 on whether to advance it into front-end engineering and design (FEED).
“A GTL facility would be a multi-billion dollar investment,” said Heydenrich.
The project developers will work with the Alberta government, regulators and the local community, to explore the full impact and benefits of the proposed development, Sasol said. Public consultation will include open houses and opportunities to speak with project representatives before the company files a formal regulatory application.
The first project open house will be held on 26 September at the Dow Centennial Centre in Fort Saskatchewan.
Talisman and Sasol announced in June that they would not be moving forward with plans to jointly develop a GTL facility in western Canada.
Sasol had granted Talisman the option to participate in a feasibility study as part of a partnership between the two companies.
“After careful consideration, we have concluded that there are better ways to allocate capital in support of our strategy,” Talisman's former chief executive John Manzoni said in June. “Talisman's immediate focus is to accelerate investment in near-term liquids opportunities.”
Manzoni stepped down as Talisman chief executive on 10 September after five years with the company. Hal Kvisle, who was a director at Talisman and former chief executive of pipeline company TransCanada, replaced him with immediate effect. Talisman gave no reason for Manzoni's departure.
Talisman's strategy shifted under Manzoni's watch, driven by persistently low US natural gas prices and operational problems in the North Sea.
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