I have bought a small holding in Oxford Catalysts (LON:OCG) . The process of converting gas to liquids, (synthetic oil) has existed for some time but has only been economic in massive plants requiring huge capital expenditure: Shell’s Pearl plant in Qatar cost $19bn! OCG, a spin out from Oxford University, has developed a modular, small scale gas-to-liquids, (GTL) capability and commercial roll out has now begun. The opportunity comes from being able to convert low-price gas to higher-value liquid fuels. Much has been written in the press recently about the US becoming a net exporter of “energy” in the next decade due to the rapid growth in shale gas production due to “fracking”. A small scale GTL plant producing 2,500 barrels of oil per day should cost around $250m opening up the market to mid-sized shale gas companies.
Thus far OCG has successfully operated demonstration plants with its partner SGC Energia in Austria, with Petrobras in Brazil and with an unspecified company based in Asia Pacific. In the first half of 2012 it received the first milestone payment from Petrobras and the technology has been validated though selection for field developments by Rosneft and Sierra Energy.
The sales pipe line is also starting to convert to commercial scale projects: On 7th September it announced an order for a 1000 bpd commercial GTL plant by Calumet at Karns City, Pennsylvania. Plant design is expected to be complete by end of 2012 with a final decision to proceed expected in H1 2013. Revenues to OCG are expected at $10m during 2013/14 and $30m over the first 20 years of the plants operation. On 30th November it announced that from 2015, British Airways had committed to purchase for 10 years, at market prices, the jet fuel produced by the GreenSky London project being developed by Solena fuels. At current prices it is worth $500m. GreenSky London is the first of several waste-biomass to jet fuel projects planned by Solena. It will convert 500,000 tonnes per annum of London's waste, destined for landfill, into 50,000 tonnes (~1,100 bpd) of sustainable low carbon jet fuel, and 50,000 tonnes (~1,100 bpd) of ultra-low sulphur FT diesel and green naphtha, as well as renewable power. The project intends to be operational by 2015. Successful implementation of the project is expected to generate revenues of…
I have held this for about 18 months now and progress does seem to be accelerating. Personally I found the 125p placing very irritating though.
