Iran GTL project very much on track, Sasol tells OGME

Sasol told Oil&Gas Middle East, that studies for its gas-to-liquids (GTL) plant in Iran are as scheduled, contrary to reports of a possible stalemate. The feasibility study as planned will be completed next year, based on which the project cost and other factors will be worked out, said Johann van Rheede, spokesman of Sasol in South Africa.

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By  Jyotsna Ravishankar Published  July 28, 2005

Sasol has told Oil&Gas Middle East, that studies for its gas to liquids (GTL) plant in Iran are on schedule, contrary to reports of a possible stalemate. The feasibility study will be completed as planned next year, based on which the project cost and other factors will be worked out, said Johann van Rheede, spokesman for Sasol in South Africa. Van Rheede was referring to recent reports in the media, which stated that Sasol has decided to stall its GTL project in Iran until “next year or so.” Iran is expected to be Sasol’s third GTL plant after Qatar and Nigeria, where projects are nearing completion. The election of conservative mayor Mahmoud Ahmadinejad as the Iranian president had raised doubts over the South African GTL giant’s ambition to produce 600,000 barrels per day (bpd) from three or four GTL plants it hoped to develop in the next 10 years. The earlier reports had quoted Sasol’s new chief executive, Pat Davies as saying: “Sasol would have to wait and see how the relations between Tehran and Washington develop this year before making a decision on the future course of the project.” Van Rheede said the reports had misquoted Davies and there was no confusion or delay with regard to the feasibility studies for the Iran GTL project. “I confirm that the feasibility studies for the Iranian project is on schedule and wish to state that there have been a few misleading reports in the media about a probable halt to the project,” he said. However, the Sasol spokesmen said a US $1.05 billion polymer plant project will come on stream later than scheduled. The plant will comprise a one million tonne per year (tpy) ethane cracker and two 300,000 tpy polyethylene plants, where both low-density polyethylene and high-density polyethylene will be produced. He refused to comment on the reasons for the project delay or on a probable date for its completion. The Iranian GTL project is being undertaken in association with the state oil company. Iran’s South Pars field has the world’s largest gas deposits. Separately, Sasol’s Qatar project is still set to come on stream next year; the plant will convert about a third of a billion cubic feet of gas into 34,000 bpd of liquids. However, Davies said high steel prices, which rose to record highs last year on the back of Chinese demand, would make a proposed expansion of the plant to produce 100,000 bpd of liquids considerably more costly. He also voiced concern over the global shortage of skills and resources needed to build large projects. Davies said that this should be a short-term problem and that the South African company was mitigating the effect of rising costs by improving its processes. Van Rheede confirmed those comments: “Market forces like commodity prices will affect the cost of the project.”

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