TULSA — Syntroleum Corp. is looking to return to its natural gas roots.
The Tulsa-based unconventional fuel maker this week announced a joint development with an unnamed natural gas producer. The companies will spend the next nine to 12 months studying whether to build a plant that would convert natural gas into 4,000 to 5,000 barrels per day of diesel.
“We believe that projects integrating gas reserves with a GTL (gas-to-liquids) facility have a number of advantages, which include reserve and pricing security, reduced operating expense and working capital requirements, and field to plant optimizations,” Syntroleum said in a statement Wednesday.
Syntroleum in 2003 developed a 70 barrel-a-day gas-to-liquids demonstration plant at the Port of Catoosa. The facility closed three years later as climbing natural gas prices made the process uneconomical.
Recently, the Tulsa company has focused on its partnership with Tyson Foods in which it converts animal fats and greases into up to 2,500 barrels of diesel per day.
Lower natural gas prices have returned the company's interest again to gas-to-liquids technology.
“If you go back through the history of Syntroleum, natural gas prices were always too high for GTL to make sense,” Ron Stinebaugh, Syntroleum's senior vice president of finance and acquisitions told The Oklahoman on Thursday.
“The shale gas revolution has changed that dynamic. Today, gas-to-liquids makes sense.”
A barrel of oil contains six times more energy than 1,000 cubic feet of natural gas. Historically, the two fuels have traded for close to that 6:1 ratio.
But the price of natural gas spiked in 2008 and plummeted in the following years as producers discovered how to use horizontal drilling and hydraulic fracturing to produce natural gas from shale and other dense rock throughout the country.