Local energy and chemicals group Sasol and its partners, Uzbekneftegaz and Petronas, have signed an investment agreement with the Uzbekistan Minister of Foreign Economic Relations, Investment and Trade for the development and implementation of a gas-to-liquids (GTL) project in Uzbekistan.

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

Sasol CEO David Constable says the ability to harness the benefits of natural gas to make cleaner transport fuels is a key element of a lower emissions energy future.

“GTL technology is the most cost-effective way of achieving this and Sasol is very pleased to be working with partners that have both the vision to see the opportunity and the capacity to act on it,” he says.

The conclusion of the investment agreement is an important milestone in the development of the GTL project in which Sasol and Uzbekneftegaz each hold a 44.5% interest and Petronas an 11% interest.

The GTL project will reduce Uzbekistan’s dependence on importing crude oil and transporting fuels, and will diversify the use of its domestic gas resources.

In addition, it will alsoimprove the quality of the fuel pool, reducing emissions and thereby securing the associated environmental benefits.

Uzbekneftegaz will supply the feedstock from the already developed Shurtan group of gasfields and will offtake the majority of the production, under long-term arrangements.

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

Petronas president Dato’ Shamsul Azhar Abbas expressed the company’s support for and commitment to the partnership between the three companies, with the government of Uzbekistan.

Meanwhile, Constable met with the Uzbekistan President Islam Karimov prior to the signing ceremony and thanked him and his government for their ongoing support of the project.

History of Agreement
In April 2009, Sasol Synfuels International, a wholly owned subsidiary of South African energy and chemicals group Sasol, along with its partners Uzbekneftegaz and Petronas, signed a heads of agreement with regard to the possible develop- ment of a GTL plant in Uzbekistan.

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

The feasibility study has now been completed and, based on results of this study, it was determined that the establishment of a GTL plant in Uzbekistan, using Sasol’s proprietary suspended particle device technology, with an estimated nominal capacity of 1.4-million tons a year, would be feasible. The GTL plant will produce high-quality, environment-friendly diesel, kerosene and naphtha.