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/

GDP, Shares Mag will want to see evidence of a change in the trend first -wait for the RNS's to come through and then maybe you'll see Shares make that recommendation.


Laurie, I'm still not convinced. The IRE plant will not be paying sterling for its corn, at least not in the long run, even if some of the flotation money went into purchasing intial supplies. The system will ultimately be a "closed" dollar system, operating in the USA, buying corn in dollars, selling ethanol in dollars and only reporting GTL's stake in pounds.

Don't forget that due to GTL holding an 85% stake in IRE (the true legal owner of the ethanol plant), the whole of the accounting for the ethanol plant is bascially taking place in an off-balance sheet vehicle, so I'd be careful about what I made out of the numbers reported in GTL's financial results; you'd need to see IRE's figures to get the whole pictre.

Additionally IRE is a farmers' collective - not sure what implications this could have, apart from the obvious fact that IRE has created for itself a system that ensure both supply and demand, but it is a different dimension from just having GTL own the plant and buy its corn direct from the market.

EDIT: It could be a little bit of a case of swings and roundabouts with the currency, as weaker dollar prices may cause a compensatory increase across the board in commodity prices, but I'm just wary of making too broad a statement about the situation.

Crop Report out today says that corn is currently fetching $3.30 a bushel.

I thought that GTL had commented somewhere on corn prices but am unable to find the quote.

st
They have a deal

October 3, 2005
ROCHELLE, Ill. Illinois River Energy LLC announced today it has signed an exclusive agreement with Cargill for corn origination, energy and price risk management services for a 50-million-gallon-per-year ethanol plant being built here. The corn will be purchased from farmers and country elevators in Illinois and surrounding states, and supplied by the Cargill AgHorizons Northern Illinois Farm Service Group.

Dirver, thanks for the reminder. I knew they were hedged/forward contracted, but seem to remember that GTL had also quoted a price per bushel and said that they were still comfortably profitable.

so this one could still take the biofuels corp. road?
remeber the hedging disaster?

the group they are buying the corn from are somit to do with the other 10 % of the company are they not

or have i read to much between lines

Yes, Fred, see my post 713.

Caghill has purchased corn for the fist year at a much lower price than corn is now, although I can't say what the exact price was. I should imagine a lot more corn will be planted next year because of the price. I should imagine we will see corn settle round the $3 mark.

New pics just in.

Grain Leg - 12.12.06 ...........................Hammer Mills - 12.12.06 ................... View of Plant - 12.12.06


During November 2006

* Delivered Lab Equipment & Overhead Doors
* Ongoing ICM training of IRE plant operations personnel
* Continued installing large bore ductwork in the Energy Center
* Completed Installation of the ID fan, thermal oxidizer and ductwork
* Continued installing insulation on plant piping, vessels and equipment
* Continued installation of the foundations for the grain conveyor/DDG tube. Completed installation of the steel supports and racking for the conveyor
* Completed installation of the DDG feed tube from the Process Building to the grain solos
* Completed installation of the hammer mills and scalpers in the Grain Silo
* Completed installation of cable tray, wiring and terminations in the Grain Silo MCC Room. Completed portions are being energized.
* Completed Process Building instrumentation and pipe installation
* Continued pulling and terminating cable in the Process Building
* Completed installation of Process Building and Energy Center siding
* Completed Process Building and Energy Center roof & insulation
* Continued painting of plant system piping
* Commenced heat trace installation on system piping
* Completed installation of Pumphouse MCC Equipment. Completed portions are being energized
* .Complete DSC Installation
* Continued installation of plant fire protection piping
* Completed Pump House Structure. Completed tank erection.
* Commenced painting of inside of water tank
* Energized permanent power to site switch cabinets and transformers. Equipment has been locked out to provide only authorized access.
* Hydrotesting of Tank farm tanks has commenced.
* Completed erecting Tank Farm pipe rack and installing piping
* Completed last portion of the rail track servicing the Receiving Building
* Completed installation and certification of the truck scales
* Completed grading, shaping and asphalt paving of site roadways
* Commenced bumping of Process Building & Energy Center motors
* Start Up of Grains has commenced
* Corn shipments commenced 16th November and Silos are being filled.

Nice update Driver. Looking forward to some blue price movement shortly - like the sky in your new pics

Mr Turbot
Very soon to be up and running, and the sp.

Mr Turbot, the sky can be made to look like that if you use a polaroid filter ;o)

Gents, I am looking to understand a little more about the effect of share consolidation. The week before consolidation GTL was priced at around 2.35p on average. Post consolidation (100:1) the share price has been hovering about 201.00. I equate this to a 'drop' of 15% (assuming 100:1 equates to 235.00p). Is it common for stocks to 'drop' on consolidation or are there others factors at play.

Thanks in advance for any feedback.

it would be nice if the plant was announced operational before chritmas closing days etc as it looks like the market's in a good mood. Lots of blue'
could be recieved better than say if everything was going down like it was a few months back.

Darradev
Yes some times they can drop after consolidation but not always, in GTL's case it could have been punters getting out of a penny stock because they didn't have many one investor on another site complained he only had 30 shares so he sold them if you look at the trades over the past week there are some small amounts being sold off.

The other factor here is waiting for a delay announcement that will knock the sp temporary giving a top up opportunity.

Driver, I don't think it was consolidation that caused the fall, it was SL dumping 30% of its holding.
Looking at all the work still going on I don't think the plant will be open until next year.

they've already said that poldark - something like plant open in december but the contract scheduled for finish , (Builders), was jan 07.

poldark

As was said earlier Standard Life properly dumped some stock may be to pick them up later at a cheaper price as they saw the sp falling they still hold 6.697% of the company. Yes I agree it would have also have knocked the sp.

GD - it was also said that they were ahead of schedule, and a plant may be operational when building work is still going on especially if it is for storage buildings or areas that are not needed immediately. But like you all i'm looking forward to a healthy rise around xmas time.

Is anybody going to be brave and speculate the % rise.

I'm going to go on the basis that AIM stocks can move very very quickly such as Renesola last week which doubled on news which is going to be less significant than this, but i would take a guess at a 40% - 50% rise over a week long period.

Although this would only take the share to 3, which it has been at less than a year ago (or 3p at the time) i would presume that with a few contract wins and when production gets fully operational and if news comes out that it will expand could knock it up even higher.

If i am right then i will be very happy!

Thoughts?

similar to you GHJ but see more of a 70% rise over 2 week period dependant upon how the market is doing in general on the opening day, but you never know, maybe it will rise 2% !! - my only worry is that GTL has not already won contracts for its output as was the case with Biofuels etc, maybe its a different scenario with ethanol im not sure, any ideas?