SAN FRANCISCO Aug 20 The investment wing of the Saudi Arabian Oil Company has spearheaded a $30 million investment in San Francisco-based Siluria Technologies, a company that plans to produce low-cost gasoline from natural gas, the companies said Wednesday.
Siluria's two-step process converts natural gas to ethylene, and ethylene to liquid fuels such as gasoline, diesel and jet fuel.
The company said the technology could enable natural gas to supplement petroleum as the worldwide basis for transportation fuels and some chemicals.
Siluria currently operates three pilot projects on the U.S. West Coast, which have been producing small quantities of gasoline since March of 2013. It plans to open a larger-scale $16 million demonstration unit in Texas by the end of the year.
The company then plans to tap some of the nearly $100 million in funding it has raised since its inception to begin opening commercial-scale plants in late 2017 or 2018.
"Projecting long term, our operating costs to produce a fuel are probably something like $15 to $20 a barrel," said Ed Dineen, chief executive officer of Siluria.
That would translate into $1 a gallon gasoline at today's prices, about half of what it costs to make it from petroleum, he said. He expects the company to be producing fuel at that price by around 2021.
Dineen said that the Saudi Arabian Oil Company, or Saudi Aramco, was interested in investing in Siluria because it has been unhappy with the value it has received from their abundant supplies of natural gas.
"The ability to bring a technology that can upgrade natural gas to higher-valued products was attractive," he said. "And they have a genuine interest in new technology."
(Reporting by Rory Carroll; Editing by Bernard Orr)
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