| Subject: Papua New Guinea: Rich in Gas: Syntroleum, Kuwaiti firm team up for fuel project |
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Date Posted: Sun, Dec 24 2006, 04:03:24pm
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http://www.tulsaworld.com/BusinessStory.asp?ID=061220_Bu_E1_Syntr66379
Papua New Guinea: Rich in Gas: Syntroleum, Kuwaiti firm team up for fuel project
One day after announcing plans to sell its production assets for up to $25 million, Syntroleum Corp. said Tuesday it has signed a deal to build a natural gas-to-liquids plant in Papua New Guinea.
The news caused shares of Tulsa-based Syntroleum to surge $1.29, or 46 percent, to $4.10 in trading on the Nasdaq market.
The plant would produce up to 50,000 barrels of clean-burning, synthetic diesel fuel a day.
Syntroleum is partnering with Kuwait Foreign Petroleum Exploration Co. to build the facility.
The Tulsa company has a proprietary process for converting natural gas and coal into synthetic diesel or jet fuel. Monday, Syntroleum announced plans to sell its production assets in Nigeria for up to $25 million. Executives said the money will be used to commercialize Syntroleum's gas-to-liquids technology.
The Papua New Guinea facility has been deemed a high-priority project vital to the country's effort to capitalize on its abundant supply of natural gas, Syntroleum said in a press release.
"This will make (Papua New Guinea) one of the few countries in the world where ultra-clean, environmentally friendly GTL fuels are produced," the press release stated. "The plant will become an anchor
facility in the newly created Konebada Petroleum Park near the capital city of Port Moresby."
Syntroleum President and CEO Jack Holmes said a feasibility study on the project was performed.
"Our focus now is to put in place the major contracts for the facility and move to financing," he said.
Kuwait Foreign Petroleum is one of the world's leading exploration and production companies, with properties in Africa, the Middle East, Asia and Australia.
"This project is a stepping stone for us to embrace downstream monetization of gas resources," said Bader N. Al-Khashti, chairman and managing director of the Kuwaiti company.
Syntroleum had $38.3 million in cash as of Sept. 30.
"We've got two years worth of cash on our balance sheet," said Gary Gamino, director of investor relations.
In addition, the company could tap up to $40 million in new financing under a recent agreement with Azimuth Opportunity Ltd. That agreement allows Syntroleum to sell up to $40 million worth of stock to Azimuth over two years.
Despite Tuesday's rally, shares of Syntroleum are down 54 percent this year.
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