Labour plan for synthetic petrol

Press, 23 September 1981, Page 15

Labour plan for synthetic petrol

PA Wellington Plans for a three-stage development of synthetic petrol production have been outlined by the Labour Shadow Minister of Energy (Mr Tizard). The proposal would initially reduce synthetic petrol production plans about 75 per cent but put the fuel on local markets earlier, delay chemical methanol exports, and postpone full synthetic production until the late 1980 s. Reactions to the plan suggested that it was technically possible, but would require more engineering work or cause process inefficiencies. Mr Tizard said that Government plans to build the pioneering plant over 39 months, possibly starting late this year — would overtax foreign borrowing and local construction resources. He said Labour would divert chemical methanol from the Petralgas plant planned to start exports in 1983 to a smaller version of Mobil’s methanol-to-petrol conversion unit. “The methanol-to-petrol conversion is a series of small units linked together.” he said. “We would build maybe two and use methanol from the Petralgas instead of exporting it. "Once the Marsden Point refinery expansion is completed in 1984 there would be

skilled staff available to build the first 2200-tonne train. The second methanol train could follow later.’’ Mr Tizard said Labour believed that planned big projects — the refinery and Glenbrook steel mill expansions. plus Taranaki energy developments — would strain local resources. “We don’t think New’ Zealand can stand the overseas borrowing to do all the jobs, and w’e have not got the manpower needed," he said. He had not talked with Mobil Oil. a 25 per cent partner on the project — about the. proposed changes. “They’ve not bothered to come to us, but we did talk during early planning stages and were told the conversion unit was a series of small stages,” he said. ‘’Building the plant in stages will also allow checks on whether the process works on a large commercial scale." Petralgas — 51 per cent owned by the Government, with Alberta Gas of Canada — plans to produce 1200 tonnes of methanol daily, but its output will be higher quality than methanol from two proposed 2200-tonnes-a--day trains feeding the synthetic petrol unit. The chairman of the Synthetic Fuels Corporation. Dr Colin Maiden, said that there was "no easy answ’er" to the question of whether the

staged development was possible. "Detailed engineering studies will be needed," he said. A spokesman for the Commission for the Environment — which audited environmental impacts of the conversion process earlier this year — said that the proposal appeared technically feasible. The plant was designed to use four of its five methanol-to-petrol unijs at any time. But the corporation had indicated that the planned design could run at 50 per cent capacity during gas shortages, or 30 per cent "at significantly lower efficiencies.” Synthetic petrol is expected to provide one-third of New Zealand’s petrol requirements in 1986, when the plant starts full production — 22 per cent of total transport fuel requirements. Condensate extracted from the Maui field with the gas would provide another 8 per cent of transport fuel needs. The 2200-tonne trains represent about 80 per cent of costs for the project — last priced at $960 million. Government estimates in July said that the project would cause balance-of-pay-ments deficits totalling $6BO million by 1986. and owe $330 million by the end of this decade. The Petralgas plant is expected to earn $75 million a year in export income.