BLAINE, Wash., July 28, 1999 (PRIMEZONE) - ARCO (NYSE: ARC) and Syntroleum Corporation (NASDAQ: SYNM) today announced the completion and the successful start up of their Natural Gas-to-Liquids (GTL) pilot plant.
Located at ARCO's Cherry Point Refinery near Bellingham, Washington, the 70-barrel per day pilot plant has achieved initial operating targets and is proceeding with the evaluation program. The pilot plant is testing new reactor designs and high performance Fischer-Tropsch catalyst for the Syntroleum Process, a proprietary process for converting natural gas into synthetic fuels and hydrocarbon-based specialty chemicals.
The pilot plant incorporates proprietary reactor designs for the autothermal reformer and the Fischer-Tropsch synthesis reactor system. The autothermal reformer uses natural gas and air to produce synthesis gas, a mixture of hydrogen and carbon monoxide. The synthesis gas is processed in the Fischer-Tropsch reactor to produce a raw synthetic hydrocarbon product. This raw product can then be processed in separate steps into fuels that are exceptionally clean, contain no sulfur or aromatics, and can be distributed through the existing fuel distribution infrastructure and burned in conventional engines. The proprietary Fischer-Tropsch catalyst developed by Syntroleum is key to the process.
"The successful integration of the new catalyst system and the advanced reactor design represents a major step forward in assessing this important technology. We will build upon the knowledge gained in this plant to refine our design concepts for large-scale plants. Our ultimate goal is to deploy an economically attractive design for commercializing stranded natural gas resources," said Jeff Bigger, ARCO's Gas to Liquids Technology Manager.
"This is an important step in further confirming the economic and technical feasibility of Syntroleum technology," stated Mark Agee, Syntroleum President and Chief Operating Officer. " It expands our base of reactor designs and catalyst systems, and we expect it will further lower capital costs in large-scale applications. We believe that the data from this plant will advance the Syntroleum Process as a viable option for monetizing stranded gas. In the months ahead, we expect to be assisting all of our licensees with evaluating this new technology for their individual plans. They should be the first to reap the benefits that economic GTL technology promises, turning the huge stranded gas resources around the globe into new sources of valuable and much needed environmentally clean fuels."
The project, which is being led by ARCO's upstream technology unit, ARCO Technology and Operations Services, based in Plano, Texas, is staffed with personnel from ARCO's Plano offices, the Cherry Point Refinery, ARCO's Prudhoe Bay field in Alaska, as well as Syntroleum. The plant's reactor design was a joint ARCO/Syntroleum effort. Syntroleum conducted development of the catalyst being used in the plant in the company's Tulsa laboratories.
Tulsa-based Syntroleum Corporation licenses its proprietary process for converting natural gas into synthetic crude oil and transportation fuels. The process is designed to apply in plant sizes ranging from 2,000 barrels per day to more than 100,000 barrels per day. Besides ARCO, current licensees include Enron, Kerr-McGee, Marathon, Texaco and YPF.
Los Angeles-based ARCO has been a leader in natural gas development throughout the world, including China, Indonesia, North America and the North Sea. It's current portfolio contains interests in major undeveloped natural gas resources including more than 35 trillion cubic feet on the North Slope of Alaska and more than 20 trillion cubic feet in the Tangguh field in Indonesia. ARCO is actively pursuing LNG projects for these fields; however, with continued progress, GTL could become an economic option or complimentary commercialization option for a portion of these gas resources.
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Some of the matters discussed in this news release including potential development of commercial gas to liquids technology are forward-look statements that involve risks and uncertainties. Actual results could differ materially, including ultimate commercial viability of the Syntroleum process being tested, based upon on numerous factors, including the ability to scale up pilot plant technology to commercial size, the level of operating efficiency of a commercial plant, the costs of sustained commercial plant operations, the availability of compatible transportation facilities and the realizable value of the liquids production of any such plants as well as other risks detailed from time to time in the companies' SEC reports, including ARCO's 1998 report on Form 10-K and Syntroleum's 1998 report on Form 10-K.