US crude oil price drop stresses economics of GTL projects

HOUSTON (ICIS)–The recent collapse of US crude oil prices has significantly affected the economics of several gas-to-liquids (GTL) and other unconventional projects, the director of the XTL & DME Institute said in remarks made available on Tuesday.

“The shale revolution has created new opportunities by producing abundant and low-cost supplies of natural gas in North America,” said Ron Stills, the director of the XTL & DME Institute.

Stills is the keynote speaker at the Monetizing C1 Methane Feedstocks 2015 conference taking place 25-26 February in Houston.

“However, now the shale revolution is creating new challenges due to increasing supplies of crude oil, which are partially responsible for the current collapse in oil prices and the uncertainty about future prices,” he said in prepared remarks.

“Since the market value of gas monetization products such as transportation fuels via [gas-to-liquids], methanol, ammonia and LNG are significantly affected by global oil prices, the economics of gas monetization projects are stressed.”

Stills’ presentation will kick off the conference on 25 February. It will focus on the current state of shale oil and gas and its impact on crude oil prices. He will also touch on how the value of gas monetization products are related to crude oil prices as well as illustrative economics.

The first day of the conference will be mostly dedicated to the gas-to-liquids (GTL) movement and the ammonia and urea markets.

The second day of the conference will focus mostly on the methanol market.