The technology under consideration for the feasibility study is not new or untested but rather links conventional equipment in a unique way. The feasibility study is expected to be completed in four months at a cost of approximately $1 million. A joint venture will be formed with the Company receiving a carried 25% interest in exchange for the long term use of site and certain generation equipment should the project be completed.
The current low cost of natural gas and abundant supplies produced from unconventional shale resources enhances the opportunity to profitably convert natural gas to higher value liquid fuels. The focus of the feasibility study will be on smaller units capable of converting 5 - 10 million cubic feet per day of natural gas into approximately 500 - 1,000 bbls per day of syncrude. A plant capacity expansion on the company's Houston Clean Energy Park may be initiated on successful completion of the initial GTL Plant. The GTL Plant concept under consideration would also be capable of exporting power into the Texas ERCOT grid.
Future projects of this type may be attractive to the numerous oil operators drilling shale gas wells that may be confronted with curtailing production or, in the extreme case, ceasing production entirely. These "stranded gas wells" would be released for production if the planned GTL units could process the natural gas immediately after completion of the well.
Steve McGuire, the Company's Project Manager, said, "BPC's Houston Clean Energy Park is an ideal location for the development of a gas-to-liquids facility. The site has access to a large intrastate pipeline, grid connection through the on-site substation and easy access to the Houston Ship Channel refinery and petrochemical complex. The feasibility study is an important step in commercializing the technical concept. Future gas-to-liquids developments like this could fill a need in the energy industry for decades to come."