Gas to liquid focus for Engineers India in Iran

Vol 8, PW 1 (07 Apr 04) People & Policy

Engineers India has drawn up plans to put India on the global gas-to-liquids map and is all set to begin work on a detailed feasibility report.

We are confident we can integrate available global technology with domestic know-how on catalysts, an EIL source tells PETROWATCH. In todays world, gas-to-liquid technology is a secret closely guarded by a few global oil companies.

But now EIL wants to break into the market and in early February made a presentation of its GTL plans to oil ministry bosses. We are waiting only for funding support (about Rs5cr) for the detailed feasibility report, he adds.

If the funds are committed today we can begin work tomorrow. The oil ministrys Oil Industry Development Board is expected to provide the money to EIL for this project while Oil India and Numaligarh Refineries are likely to be its local partners.

EIL is clear about the benefits of GTL technology for India. We see it as one more method to bring in petroleum products over the long-term into India.

EIL believes GTL has lower risks than LNG. The biggest advantage is that theres no need for an end-to-end tie-up.

EIL has already carried out three conceptual studies to set up a 7,100 barrels a day GTL facility at Duliajan and Numaligarh in Assam and a 34,000 b/d GTL facility in Iran. The capital cost of the Duliajan facility works out to $300m.

Factor in a local (Assam) gas price of about $2 per mmbtu and the internal rate of return works out to 8%. A GTL plant linked to the Numaligarh Refinery could be set up at a cost of $350m to use Assam gas and could generate a 17% internal rate of return.

Iran, however, emerges as the best location in EILs conceptual study thanks to the attractive gas price of 50 cents per mmbtu. In Iran, EIL estimates that a $1.2bn GTL facility could generate a 19.5% internal rate of return.

Preparing a detailed feasibility report, we are told, could take about six months. Add another 18 months to develop a suitable catalyst and integrate it with available technology (synthesis gas generation and Fischer Tropsch synthesis) and EIL could be ready with its first GTL facility within the next three years.