GTL technology: innovation vital for Russia

1
GTL technology innovation vital for Russia

• Institute for Financial Studies
• (Moscow)

2
Why do we search for new technologies?

• Restricted access to Russias gas transportation
  network
• Limited capacity of Russias gas transportation
  network
• Distant provinces

3
Alternative natural gas technologies

• Liquefied natural gas (LNG)
• Methanol (methyl alcohol)
• Carbon
• FT-process based Gas-to-Liquid

4
GTL benefits

• High quality synthetic petroleum
• High quality synthetic fuel
• Octane level up to 95 units (against 92)
• Cetane number up to 75 (against 55)
• Hydrocarbons content 0.1 (against 6)
• Sulphur content lt1 (against 15)

5
GTL disadvantages

• Poor research and development
• Facility launch specifics
• Transportation by railway only

6
Impulses for GTL development
7
Impulses for GTL development
8
Pilot GTL facilities
  Capacity, tons/day Investment, million dollars
ExxonMobil (Baton Rouge) 27 no data 
ConocoPhillips (Ponca City) 55 75
BP (Nikiski) 41 86
Syntroleum (Tusla) 9.5 60
Research and development spending ExxonMobile
600 million ConocoPhillips 400
million Syntroleum 200 million
9
Operating GTL facilities
Project Members Location Technology Capacity (thousand tons/day) Project launch
Sasol I Sasol SasolBurg, South Africa CTL 1 1955 (1993)
Sasol II Sasol Secunda, South Africa CTL 10.5-11 1980 (1998)
Sasol III Sasol Secunda, South Africa CTL 10.5-11 1982 (1998)
MossGas Petro SA Mossel Bay, South Africa GTL 6-6.5 1987
Bintulu Royal Bintulu, Malaysia GTL 1.7 1993
Bintulu Dutch/Shell Bintulu, Malaysia GTL 1.7 1993
Oryx Sasol, QP Qatar GTL 5 2006

10
GTL product structure (one ton, average by
producer)
Other
(naphtha, liquefied hydrocarbon gas,
lubricants)
30
Diesel
fuel
70
11
Compare market shares of traditional and
synthetic diesel fuels (2006 data)
Synthetic
diesel
0.5
Traditional
diesel
99.5
12
GTL productionsales scheme


13
Expenses
Construction
Assembly
6
4.3
Know how
2.7
Documentation.
Inspection.
7.2
Equipment
79.5
14
Operational expenses
15
Economic efficiency of the project
  Discount rate 16
NPV, million rubles 157.6
NPV, million rubles 4.42
IRR, 16.6
Payback period with discount, years 21
Payback period without discount, years 8
Discount rate 12
1604.5
44.93
16.6
12
8
16
Non-production restrictions

• Minimum production 12 billion cubic meters
• Intermediary an engineering company - is
  required
• High probability of additional terms of
  cooperation

17
Conclusions

• GTL science-intensive, economically efficient
  utilization technology
• GTL market new market of quality automotive
  fuels
• Prospects provision of remote Far North with
  fuel and energy

18
State support industry development
19
Negative impacts of underdeveloped processing

• Higher local emissions
• Loss of socio-economic profit
• Jobs
• Tax inflow
• Loss of energy resources
• Industry lagging
• No possibility to form a new growth point for
  the economy

20
Possible solutions

• Working out a stimulating mechanism through the
  taxation system.
• Searching for possibilities to develop domestic
  Gas-to-Liquid technology. Patenting and licensing
  of this technology.

21
Thank you for attention