In the Slurry Phase Distillate process, natural gas is transformed into synthetic gas. A Slurry Phase reactor is used to produce linear-chained hydrocarbon waxes and paraffins. Residual gas from the Slurry Phase process is sold as pipeline gas, while lighter hydrocarbons are hydrotreated to produce pure kerosene or paraffin fractions. Ammonia is also produced and is sold or utilized downstream to produce explosives and fertilizers.

GTL diesel from the Sasol SPD process has virtually no sulfur (less than five parts per million); a notably low aromatic content (less than 1%); and a cetane number exceeding 70, significantly higher than the typical diesel rating of 45 to 55.

The GTL project is intended to reduce Uzbekistan’s dependence on imported crude oil and transportation fuels and to diversify the utilization of its domestic gas resources. The GTL project will also improve the quality of the fuel pool, reducing emissions, thereby securing the associated environmental benefits. Uzbekneftegaz will supply the feedstock, from the already developed Shurtan group of gas fields and will off-take the majority of the production, under long term arrangements.

Under the investment agreement, the investors and the GTL project will enjoy investment protection and fiscal benefits, to ensure the successful implementation and operation of the GTL facility.

The conclusion of the investment agreement is an important milestone in the development of the GTL project in which Sasol, Uzbekneftegaz and PETRONAS hold 44%, 5% and 11% interests, respectively.

The next phase will be the front end engineering and design of the GTL project which will commence before the end of the year 2011 and depending on the final investment decision, the plant will be operational in the second half of this decade.

In April 2009, Sasol Synfuels International (Pty) Limited, a wholly owned subsidiary of South African energy and chemicals group Sasol Limited, along with its partners the National Holding Company Uzbekneftegaz and PETRONAS signed a heads of agreement with regard to the possible development of a GTL plant in Uzbekistan.

A joint-venture agreement was subsequently signed in July 2009 and the feasibility study commenced in December 2009 after all regulatory approvals were obtained for the formation of a joint venture company, Uzbekistan GTL LLC.

Last week, Sasol announced that it will embark on a feasibility study to evaluate the viability of a GTL venture in Calcasieu Parish, Louisiana in the US, over the next 18 months. The feasibility study will consider two options: a 2 million tons per year (roughly 40,000 barrels of oil equivalent per day) facility and a 4 million tons per year (roughly 80,000 boepd) facility. (Earlier post.)