Indianapolis, Indiana-based Calumet Specialty Products Partners, L.P. last Monday 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 barrels per day of refined products, including waxes, drilling fluids, distillate and naphtha, from natural gas.
The Lake Charles, Louisiana plant, 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 LLC, 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 high quality 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," stated Jennifer Straumins, President and COO of Calumet. "Business innovation has been a central theme in the Calumet growth story since our inception. From our construction of a new refinery in North Dakota capable of sourcing cost-advantaged Bakken crude oil to our proposed participation as an early adopter of GTL technology, Calumet continues to achieve profitable growth in part through forward-thinking strategic investments."
"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," concluded Straumins.
Calumet has thirteen facilities located in northwest Louisiana, northwest Wisconsin, northern Montana, western Pennsylvania, Texas, New Jersey and Oklahoma.
