Syntroleum Corp. Message Board

fanatics the Bureau of Strategic Planning has map
pin located every blowhole capable of jetting over 10
ft3/min with intent to nationalize during next asteroid
threat..will pump in extra air and ignite�all blowholes on
selected longitudinal quadrant�with
intent of altering
earth�s path as required�.so forget alchemy of gas to
liquid�keep you eyes to the heavens and invest in cruise
lines,gambling and internet stocks

Solidaxel--your question on the patent issue is
more timely than ever. May we presume that Chevron
looked over the Syntroleum process and patents before
they chose Sasol? Looking on the positive side, if the
Agees agreed to a buyout by a large oil company like
Exxon that has extensive cobalt catalyst patents, could
the combination be synergistic? Couldn't Exxon then
agressively sell their their GTL technology to others and
easily pay for the cost of a Syntroleum buyout many
times over? One could see this combination as a win win
situation.

my understanding is that the risks with Exxon
depend a lot on reactor type. I think Sasol's slurry
reactor is the bubble column type (I haven't gone back to
check their web page on this yet), which might be
sufficiently different from the reactor types used by Exxon to
give some comfort.

How much exposure do you
think SYNM faces on the Exxon patent issue? Presumably,
ARCO would be highly sensitive to this and presumably
they did their due diligence and got comfortable, at
least with the reactor type they are currently testing
at Cherry Point. Any thoughts?

Thanks for the information, solidaxel. This still
begs the question, however, of Sasol's possible
infringement upon Exxon's cobalt catalyst systems and how
their FT is able to make usable gasoline at all. I'm
almost certain that if Sasol had a cobalt slurry reactor
up and running somewhere they'd be hearing from
Exxons's lawyers about it. Perhaps their work with cobalt
catalysts remains in the lab for now.

Regardless,
Chevron partnership with Sasol for the conversion of
natural gas into clean synthetic fuels remains both a
breakthrough for GTL technology and a curiousity for now. I
hope more information concerning this agreement is
forthcoming soon.

here is an excerpt from Sasol's web site (follow
Dooper's link in a recent message), note in particular the
last sentence:

Two new types of Fischer-Tropsch
conversion technologies have been developed and operated by
Sasol. One utilises the Sasol Slurry Phase reactor to
produce waxes and middle-distillate fuels. This
technology was developed from the conventional Arge tubular
fixed-bed reactor technology. The other technology uses the
Sasol Advanced Synthol reactor to produce mainly light
olefins and gasoline fractions. Sasol has developed high
performance cobalt-based and iron based catalysts for these
processes based on extensive research as well as many years
of commercial experience. Sasol produces its own
catalyst for commercial use. Sasol�s new-generation cobalt
catalysts, in particular, will enable further operational
improvements.

You guys are the foundation of this message
board, I know many appreciate your efforts--thank you.
The only input I can offer today about the price
action of SYNM is that being a NASDAQ specialist who
controls a stock is a license to mint money for yourself
often at the expense of shareholders. Cherry Point
results could come out at any time, without warning and
it would seem unwise to try to trade the stock to
gain a point. I hope the MM is short when the news
hits the wires.

It has been their policy from the beginning to
license the technology only for the lighter products
which naturally are directed primarily at the fuels
market. Waxes and lubricants can be marketed only by Synm
or its partners in proprietary projects. The
Sweetwater project is one example, as was the Texaco, Brown
& Root barge. This makes sense because although, as
you say, the margins for heavy products are
potentially much higher, the markets for these products are
very small. Only a handfull of lubes plants can be
built worldwide before the market would be crushed.
They may as well be Synm projects. Also, because these
markets are small, the competing technology providers,
Exxon, Shell, Sasol, etc, all of whom rely on large
scale to achieve acceptable capital costs/bbl of
production, can't realistically target new projects to these
markets. Sasol would risk its already lucrative synthetic
wax and specialty chemical businesses; Shell would
ruin the economics of its plant in Bintulu, which at
12,500 BD was apparently profitable despite its
$70,000/BD capital cost (prior to the explosion that shut it
down). Government acceptance of F-T diesel as an
alternative fuel has the potential to significantly improve
the economics of the lighter products, at least in
this country.

Solidaxel.....if cobalt-based GTL is so much more
efficient than iron-based for the conversion of natural gas
to clean liquid fuels, why did Chevron go with Sasol
for their global venture instead of SYNM? Further,
Sasol always demands a partnership deal to keep
complete control of the GTL side of things. Don't you
think that SYNM could have given them a better
licensing deal to boot?

Thanks for yor response, I always enjoy whatever
you have to say. Just a thought--Mark Agee says GTL
momentum has really increased with Chevron's June 9
announcement it will build a 30,000 barrel a day GTL plant to
come on stream in in 2003 and they will seek to
license their GTL technology to other companies. Here's
what I speculate: Other large oil companies without
GTL technology would prefer not to pay royalties to a
competitor and be at their mercy. It would be behove them to
acquire a GTL technology NOW. If a large company bought
SYNM the potential from licensing to others would pay
for the cost of SYNM many times over. Why NOW?
Because as Chevron is aware, the success in licensing the
technology to others will be greatly enhanced by the 30,000
barrel per day plant they will build and can then
demonstrate. It takes several years to design and build a
plant so any other oil company that would like to
license its own GTL technology needs to compete
reasonably within Chevron's time frame. I hear that the
current annual market potential for GTL technologies is
estimated at $175 billoon worldwide. What do you think--a
SYNM buy out?

is not a GTL process itself. It is a process for
cracking and isomerizing heavy hydrocarbons. It can be
used with Fischer-Tropsch waxes, such as those
produced by Sasol, Syntroleum, Exxon, Shell, etc. to
produce top quality liquid lubricants. Chevron's
technology is not competitive with Syntroleum's: Sasol's is.
But we already knew that.