Gas to Liquid
Commencement of Operations Started 28/12/2006
The strategy of GTL Resources plc is to produce liquids such as methanol and ethanol from stranded gas, corn and other feedstocks with quality counterparties. GTL manages all aspects of a project: finance, feedstock supply, production and marketing.

In line with its strategy of seeking to develop and exploit markets for alternative fuels, GTL has, since the beginning of 2001, concentrated primarily upon developing methanol projects, principally in Australia, and, more recently, ethanol project work. The Board has recognised the strategic benefits of acquiring a cash generative asset on a shorter time scale than the typical methanol construction time of three years. In furtherance of this strategy, on 6 September 2005 GTL Resources acquired a controlling interest in Illinois River Energy (IRE) to build an ethanol plant at Rochelle, Illinois, through its wholly owned subsidiary, GTL USA, which has been established for the purpose of investing in ethanol projects in the USA. GTL USA has invested in IRE by way of a subscription for units of IRE pursuant to the Unit Purchase Agreement.

This project has the advantage that the Plant is expected to produce revenues on a shorter time scale and at a significantly lower capital cost than the methanol plant in Australia.

The Company intends to further expand within the ethanol industry in the United States or other suitable markets by selective acquisition of low cost production facilities. The Company sees itself as a potential consolidator of ethanol plants in a particularly fragmented market.

FT Tip
GTL Resources, an Aim-listed company. It raised money to build an ethanol plant in the US. Raw materials costs have risen but the price of ethanol has gone through the roof. The earnings potential should be spectacular.

New Plant

Construction started at Rochelle, Illinois site in September and production from the 50 million gallon per annum ethanol plant is expected to commence in the fourth quarter of 2006. Following unusually mild weather in Illinois the project has progressed well and is on schedule and on budget. Whilst the Companys main efforts centre on the successful delivery of the US ethanol project at Rochelle, the potential expansion of that site to 100 million gallons is being investigated. In addition and consistent
with GTLs stated strategy for the expansion of its interests in the ethanol industry, other ethanol opportunities have also been identified and will be analysed. Pictures Of The Site Under Construction March 27, 2006 http://www.illinoisriverenergy.com/html/construction.html


Arden
http://gtlresources.com/documents/ArdenAnalystResearchNote.pdf
http://www.gtlresources.com/documents/ArdenAnalystResearchNote.pdf
BBC News Item On Ethanol
http://news.bbc.co.uk/nolavconsole/ukfs_news/hi/newsid_4940000/newsid_4948400/bb_wm_4948456.stm

Ethanol Priceshttp://ethanolmarket.aghost.net/
Ethanol as a Transportation Fuel
http://energy.ca.gov/afvs/vehicle_fact_sheets/ethanol.html

Annual report for 2006
http://www.gtlresources.com/documents/GTLAnnualReport2006_001.pdf
Pics from Ethanol Producer Magazine of GTL's plant.
http://ethanolproducer.com/plant-images.jsp?plant_id=302&image_id=59
Commencement of Operations Started 28/12/2006
http://www.gtlresources.com/
Economics of Ethanol
http://www.ces.purdue.edu/extmedia/ID/ID-339.pdf
2 July 2007 GTL Resources FY pretax loss narrows, plans 13 mln stg placing to fund expansion
http://moneyam.uk-wire.com/cgi-bin/articles/200707020705014067Z.html
GTL Web Site
http://www.gtlresources.com/

Who would want to eat grain for a year? Whatever the criticism GTL are producing ethanol, revenue, and profit thats what counts when investing.

"One estimate is that the grain needed to fill the petrol tank of a 4X4 with ethanol is sufficient to feed a person for a year".

"One estimate is that the grain needed to fill the petrol tank of a 4X4 with ethanol is sufficient to feed a person for a year".

If it is true then that is a pretty disturbing statistic in terms of global food production.

driver .... the geese and ducks who produce foie gras perhaps?

So how many geese or ducks does one have to chain to the average 4x4 to save the amount of fuel produced by one person eating grain for a year?

Buy poultry, short ethanol? :o)

nah! ..... buy foie gras and old Ch d'Yquem and die quickly and happy

eat the rabbit! ...... man shall not live by bread alone

cynic
Don't hide on here get back to CHP

Lapin a la moutarde - my favourite!!

driver ... no fun cartoons on there! ..... and another thing, why should we not use corn for ethanol .... if we didn't bloody rabbits and pigeons would eat it all.

I seem to remember the Arden report adressing this Haystack - should put your mind at ease.

--

'One estimate is that corn needs 30 per cent more energy than the finished fuel it produces.'

That seems like a strange product. You end up with a net energy loss.

http://www.dailyreckoning.co.uk/article/ethanolproductionincreasesbutisitavalidalternativetooil0045.html

HAYSTACK!

There are two negative issues which are being aimed at ethanol:
Energy balance. A report from Cornell University suggests that it takes 70% more energy to produce ethanol than it yields. Since this study improved operating efficiencies have enabled a plant to now produce 15% more ethanol for 20% less energy. In addition a number of other studies have suggested that the energy balance is positive by up to 60%.

If the energy used to produce Ethanol is itself from renewable sources, then problem solved. Maybe even the farmers could use Ethanol in there tractors ?

no it's not! ...... maize is a greedy crop; using maize for ethanol prevents that same land/crop being used for other food crops; the price will be subject to futures fluctuations twice over - firstly as a foodcrop (already a lively market) and then exacerbated by demands for ethanol production.

Cynic, I'd appreciate your comments on why you think this stock is in the current downward trend and has been for the last year or so. I would have thought that 'production start' would have been a positive influence, but am dissapointed to see it has not been so.

you flatter my expertise, sir! ...... however, though i stand to be corrected, GTL is still some way off profitability ..... further, apart from polite noises about how well production is doing, i do not recollect seeing a recent trading update, bullish or otherwise ..... boredom sets in and investors move their funds elsewhere .... new investors see nothing to inspire so stay away

Cynic, GTL ought in theory to be profitable already, given that IRE is now producing ethanol at full capacity.

What we are waiting for is the financials to back this up, although a broker note to predict some figures would be nice too.

Ethanol keeps heading upwards: 232 a gal.

I keep wondering if I ought to buy more GTL. Maths says yes; "common sense" (whatever that means) says I've gone overweight enough and am already on a 30% paper loss.

easy answer then ..... NO