Thursday, March 12, 2009

Sasol, Petronas Studying Fuels Plant in Uzbekistan

By Carli Lourens

-- Sasol Ltd. and Malaysia’s Petroliam Nasional Bhd. are studying a possible gas-to-fuels plant in Uzbekistan that could be bigger than Sasol’s Qatar facility, the largest such plant in the world.

Sasol is in talks with Petronas and an unidentified local gas company, Lean Strauss, a general manager at Johannesburg- based Sasol, said in a speech today. Sasol, the world’s biggest producer of motor fuels from coal, may be able to report that the project has moved into the feasibility stage within the next six months, he said.

“It could be about 40,000 barrels a day,” Strauss said in an interview. The Quatari plant, in which Sasol has a 49 percent stake, has the capacity to produce 34,000 barrels of oil equivalents per day. The rest of the plant is owned by state- owned Qatar Petroleum.

Uzbekistan will soon become a net oil importer, boosting the need for local fuel production, Strauss said. The country has more than 60 trillion cubic feet of gas reserves and a Sasol plant would need about 3 trillion cubic feet, he said.

Sasol is also looking at opportunities in China and India to apply its proprietary technology to produce gasoline, diesel and chemicals from gas or coal. Sasol makes most of its fuel in South Africa, where it is the biggest producer, from coal.

No one was available for comment at Petronas’s Cape Town office when Bloomberg News called.

Petronas Investment

Petronas plans to invest more than $750 million in oil and gas projects in Uzbekistan, Interfax reported in November, citing Uzbek President Islam Karimov. Malaysia’s state oil and gas producer signed an agreement in May to produce synthetic fuel at the Shurtan gas chemical complex, the news agency said.

Sasol’s Qatari plant, built at a cost of about $1 billion, experienced protracted “teething problems” and Sasol said for the first time today that it’s producing at full capacity “almost on a daily basis.” Oryx started producing fuel according to the required specifications in the first quarter of 2007 and has been ramping up capacity since then.

Fuel from Oryx is sold for more than fuel made from oil as it contains less harmful substances, Sasol said in September.

Oryx will be surpassed as the world’s biggest gas-to-fuels plant by the Pearl facility, a joint venture between Royal Dutch Shell Plc and Qatar Petroleum, with planned production of 140,000 barrels a day. Production is scheduled to start in late 2010 or early 2011.

Sasol fell 19 rand, or 7.2 percent, to 243.50 rand as of 3:17 p.m. in Johannesburg, giving a value of 156.9 billion rand ($15.5 billion).

To contact the reporter on this story: Carli Lourens in Johannesburg at