oil/gas the crisis looming beyond 2020, page-19

Subject re: oil/gas the crisis looming beyond 2020
Posted 16/01/05 11:11 - 48 reads
Posted by kahuna1
Post #93454 - in reply to msg. 93433 - splitview

Understood Ian,

Yep LNG and GTL different.

Ready market for LNG as it is.
GTL process even more expensive than LNG process of course.
By products out the other end from GTL as you know are different.

Economics of it and end goal are the same.
LNG all it really does is convert gas into a liquid stable state easily transported.
GLT in essance is a refining of the GAS as with crude oil and coming out with different products at the end.
GTL, end products of diesel and Naptha and waxes.
GTL also produceds heat which can be used for energy production as another by product.
GTL end products even more useful than LNG and commanding even higher prices as they are more in demand than LNG is at present.

Both being very heavy on the up front capital investment. GTL much much more so than LNG process.
LNG costs of conversiuon have been coming down and in the last 20 years the whole process has improved by over 10%.

Either way, oil and energy demand are the keys behind it. For LNG the break even is now below USD $15- but for GTL due to the actual refining process going on still sits a few dollars higher.

Its not so long ago oil was sitting around the USD$20- mark. LNG was viewed as break even or low economic returns with the price there. GTL was at best risky and borderline break even.

Companies and investors need to get used to a higher oil price before they are happy to plough the money needed into GTL. Break even LNG is around USD$5- lower so baby steps first.

GTL also not suitable for some of Australias reserves in the first place due to the isolated nature of them.
GTL being exothermic and producing heat as a result of the process is able to generate electricity with the excess heat produced. For all Australias large deposits being in very remote areas and in most cases out to sea, I suspect it will be a long time if ever that we see a GTL plant as opposed to a LNG plant being planned.

Thats why I chose to talk about LNG as opposed to GTL process. I am sure you knew this of course. Just for anyone else following the thread, its all complicated to say the least.

Found out how little I knew about the whole industry when I started researching. I thought I knew a bit, however the more I learnt ... the less I realized I actually knew.

Thats life.

However LNG with even a deep sea remote operation being at worst a break even of USD $15- ... well the price at USD $35- as opposed to USD$ 20- the whole process is much much more valuable. Oil currently at USD$48- and change, fortunes of companies with large know gas reserves the future seems bright to say the least. From the average oil price of 2002 of USD $22.51 to 2003 at USD $27.54 and 2004 USD $40.54 ..... even on this the profit and expect profits have gone from USD $7.51 in 2002 to USD $25.54 in 2004. Thats a whopping 340 % increase.

All depends on your long term view. I know mine, buy on dips. Just cant see any solution to the problem.

cheers
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