Sasol Chevron officials said they will be glad to get a head start on competing GTL projects, although theyll welcome company when it arrives.

We believe it is important to have multiple suppliers, said Greg Skledar, general manager of base oils for Sasol Chevron. It just makes end users more comfortable. But we do believe that being a leading player gives us an opportunity to go into the market with commercial products and to start working with customers.

For years the lubricants industry has anticipated the arrival of large volumes of GTL base stocks – fluids expected to perform on par with polyalphaolefins while offering significant advantages in manufacturing costs. The technology to turn natural gas into oil products has existed for decades, but large-scale refineries are becoming economical now, partly because of clean fuels mandates.

The only existing source of GTL base oilsis Shells smaller refinery in Bintulu, Malaysia. It has capacity to make approximately 15,000 b/d of oil products – about 10 percent of which is waxy raffinate that is shipped elsewhere to be processed into finished base oil.

The Oryx base oil plant is now undergoing a feasibility study and design work has yet to be done, but Qatar Minister of Energy and Industry H.E. Abdullah Bin Hamad Al-Attiyah said the Oryx base oil plant will cost $200 million and have capacity to make 8,000 b/d of base stocks.

Oryx is being developed in two stages, and ChevronTexaco is a participant in the newly announced base oil plant, even though it is not involved in the first phase of the overall project. The first phase, a partnership between QP and Sasol, is scheduled to complete commissioning by the end of this year and to begin commercial production early in 2006. It has capacity to make 34,000 b/d of diesel and other products. Sasol Chevron and QP have signed a memorandum of understanding to build a 64,000 b/d expansion.

In addition, Sasol Chevron is developing a separate integrated GTL project in Qatar that would have 130,000 b/d of capacity. The Oryx expansion and the integrated project may also end up with base oil operations but no decision has been made yet.

Oryx I already includes a hydrocracker, so the key ingredient for the base oil plant will be the addition of tankage, loading systems and a dewaxing unit – in this case using Isodewaxing technology licensed from ChevronTexaco.

Officials said the partners have not yet decided who will manage the base oil plant. They expect to sell at least some of its product on the open market.

Sasol is an energy company based in Johannesburg, South Africa, while ChevronTexaco is a major oil company with headquarters in San Ramon, Calif. Sasol Chevron is a joint venture based in London. QP is the national oil and gas company of Qatar.