Syntroleum Corporation of Tulsa, Oklahoma, has completed two additional contracts relating to construction of its 11,500 barrel per day gas-to-liquids specialty products plant known as the Sweetwater project under development in Western Australia.
Syntroleum Sweetwater Operations Ltd (SSOL), an indirect, majority-owned subsidiary of Syntroleum, has signed an option with the State of Western Australia, which grants SSOL the irrevocable right to lease the 180-acre site for the Sweetwater project. The lease option is for a term of two years and execution of the final lease agreement is subject to completion of project financing and SSOL giving RWE Industrie-Losungen GmbH (formerly known as Tessag AG) notice to proceed with construction of the plant under the engineering, procurement and construction contract between SSOL and RWE.
"Finalizing the lease with Syntroleum is an important step forward in our efforts to make this project a reality in Western Australia," stated Clive Brown, minister of resources for the State Development of Western Australia.
Separately, SSOL and the Water Corporation of Western Australia have completed a 20-year agreement for the supply of water to the Sweetwater project. Western Australia's Water Corporation is one of the largest operators in the Australian water industry, providing water, wastewater, drainage and irrigation services throughout Western Australia.
Under the terms of the agreement, Water Corporation will, subject to construction of a new seawater intake and conveyancing system and water desalination plant and satisfaction of various other conditions, supply over 1.4 million gallons of water per day to the Sweetwater plant for use in process cooling, supplementing the water stream that will be produced as a by-product of the plant's gas-to-liquids conversion process. In return, SSOL will provide Water Corporation with steam and electricity produced by the plant and will pay the Water Corporation a modest fee for the operation of the water system and provision of the water service.
This water supply arrangement is part of the State of Western Australia's strategy to facilitate the development of an integrated petrochemical industry in the region, capitalizing on the greater North West Shelf's extensive natural gas reserves. As part of that strategy, and in order to provide water supplies at reasonable costs, the State's Cabinet approved funding for the Water Corporation to construct a new seawater supply scheme and desalination plant on the Burrup Peninsula.
"We are very happy to have completed this agreement with Syntroleum. The planned construction of the water supply facilities on the Burrup Peninsula will represent a significant investment by the Water Corporation in a rapidly expanding area of industrial development. We believe that the availability of an integrated multi-user industrial water supply scheme for the Burrup Peninsula will accelerate other projects in this important location," said Dr. Jim Gill, Managing Director of Western Australia's Water Corporation.
"These contracts mark important milestones for advancing our Sweetwater project toward the construction phase," stated Randall Thompson, Syntroleum's vice president in charge of the project. "We are pleased that our Sweetwater project has been a catalyst that enables Western Australia to develop industrial water resources on the Burrup, which will no doubt encourage others to locate there."
The Sweetwater plant will employ the Syntroleum Process to convert natural gas into ultra-clean, high-performance and virtually sulfur-free synthetic specialty products, such as lubricants, industrial fluids and paraffins, as well as synthetic transportation fuels.
Syntroleum Corporation is the developer of a proprietary technology for converting natural gas into synthetic liquid hydrocarbons. The company, in partnership with others, plans to build GTL plants using its technology in a number of global locations, Sweetwater being the first. Additionally, Syntroleum licenses its process to oil companies for the manufacture of fuels.
Current licensees include ARCO (now BP), Enron, Ivanhoe Energy, Kerr-McGee, Marathon, Repsol-YPF, Texaco and the Commonwealth of Australia.