Calumet becomes JV partner in commercial GTL project in Louisiana
Calumet Specialty Products announced its investment as a joint venture partner in the construction of a commercial gas-to-liquids (GTL) plant that is expected to produce 1,100 bpd of refined products, including waxes, drilling fluids, distillate and naphtha, from natural gas.
The plant in Lake Charles, Louisiana, which is expected to be operational by late 2015, has a total estimated cost of $135 million. The brownfield plant will be owned and operated by Juniper GTL, a company also co-owned by SGC Energia and Great Northern Project Development and will be funded through a combination of equity and senior secured debt.
Calumet intends to invest $25 million in exchange for an equity interest of approximately 22% in the joint venture.
The Juniper GTL process starts with the reforming of natural gas into a mixture of hydrogen and carbon monoxide. These gases are then sent to a reactor, where they combine into a paraffinic liquid through a reaction known as Fischer-Tropsch (FT). The resulting liquid is ultimately refined by distillation and hydrogenation.
The whole process, guaranteed under a single GTL license (XTLH), focuses on the reliable, profitable production of specialty and fuels products.
"This joint venture offers Calumet the opportunity to lead a growing market that converts lower-cost natural gas into higher value liquids," said Jennifer Straumins, chief operating officer of Calumet. "Looking ahead, we believe this project puts Calumet in a leadership position to capture promising GTL opportunities which we anticipate to arise given expectations for continued growth in domestic natural gas production in future years."
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