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/

would be nice if laurie's prediction came through .... at least i would be back in the money, though my holding is quite small.

I need around 2.30p before I break even as well.

If and when the plant passes acceptance testing (end Jan?), we ought to get confirmation of production rates and hopefully a corresponding waking-up of the market.

It's been a soggy three months for ethanol producers - at least, RVA is down from 275 to around 204; hopefully once some figures start trickling out of GTL we will be rightfully put ahead of RVA.

Nice to start the post-Christmas period with a rise - here's to much, much more in 2007.

232p puts me in the black :o)

after my top up of 195 this morning about 231 puts me in the black, maybe 232 with comm.

For what it is worth - this on t1ps.com today by Tom W

GTL - Now a producer/stance upgrade
GTL Resources (GTL) today announced that its ethanol plant at Rochelle Illinois commenced production yesterday. I need a longer post Christmas chat with Peter Middleton but it seems clear to me that this plant could easily be chucking off free operational cashflow of 10 million plus per annum within a year or so. At 200p (remember there was a one for one hundred share consolidation) the company is valued at around 45 million. As such - even without any upside from deals in Oman and elsewhere which may still happen - the shares are cheap and, now that the company is operating profitably and generating cash, I am moving my stance from "speculative buy" up to "buy."

A good write up shame most of the others are shut down to the New Year.
The Offer price needs to breech the 2.05p and then should continue.

12 bids at 2.05 or more and for largish amounts but mm's were not budging!

Well thats it no more speculation as to if or when the plant is going to open there may be a few teething problems other than that GTL are now producing revenue with that I expect to see a rising sp in 07 and beyond.

looking good!

What's the reference to Oman all about?

any one knows how long it takes to make ethanol from the corn. so we know when the first ethanol is due. and the amount at each time its due.thanks.

dave7010
Its properly continuous when its up and running, just like a glass factory.

so if its 50 mil galons a year,and say it takes 2 months for the first ethanol to be made, 50 mil into 6 should work out at, just over 8 mil galons every 2 months, thats if it takes 2 months to make. so wot im saying is when will the first lot of ethanol be ready to put on the market. do they make the first 50 mill then sell it. or do they sell the first batch and so on.thanks driver.

"We look forward to production commencing and anticipate that our plant's
first quarter of operations in 2007 will be profitable," said chairman Peter
Middleton.

The 80 mln usd project remained within budget despite the "significant"
inflationary pressure within the industry, said GTL

The plant is expected to reach its nameplate capacity in January next year,
it said, adding the group has already filed applications for permits to double
the facility's capacity.

is "nameplate capacity in January next year" 2008? ..... i suspect so; typical american mangling!

Cynic, I think it's 2007; has been predicted as this for months (cf Middleton's comment about profitability), but WDIK.

Dave, I think it's fair to say they'll produce on average around 4 million gal per month and sell it on a rolling basis (or at least ship it to market - I anticipate they'll be forward selling their product, maybe they have done so already, I can't remember).

There's no way they are going to sit on a year's worth of finished product and then sell it. It's not as if they have to fill a supertanker or something

thanks

SOUL ..... given that production is only just starting up in Jan 2007, i think it is hardly likely that the plant will reach its capacity in just 3/4 weeks ..... i also question the ambiguity of "our plant's first quarter of operations in 2007 will be profitable." ....... bet that is just operational profit excluding all other overhead and therefore nowhere near what you and i would call "proper profit"

Cynic, I disagree, based on the content of the RNS's - we shall see in just a few weeks' time.

RVA's history might provide some useful clues, but I'm happy to take what I've seen at face value.

Does not answer the exact how long - but my memory recalls that GTL hope to produce enough to not be in profit but close by Annual results (I believe March?).
So if only 3 months of bringing on production imagine the next 12 months.
Below I include quotes from GTL website in no particular order that may help!

The IRE plant will be a dry-milling facility, where ethanol is produced by the yeast fermentation of corn feedstock and subsequent distillation and dehydration to remove water and by-products to produce pure (200 proof) ethanol. The corn feedstock is milled to a flour, mixed with water and dosed with enzymes to convert the starches to sugars. The conversion of starch to sugar is completed in the cooking process and the resulting beer mash is cooled before being passed to batch fermentation vessels. Yeast is then added to the fermentation vessels and, with the temperature of the beer mash being maintained at approximately 90F. The resulting beer is then passed to the distillation stage, which is a reflux distillation column, in which the column vapours are condensed to form 190 proof ethanol. The 190 proof ethanol is vaporised and passed through molecular sieves which contain a silica gel material which absorbs water molecules during the process.
The absorbed water is removed under vacuum. The ethanol vapour from the molecular sieves is condensed to 200 proof ethanol.
The residue liquids and unconverted corn mass are separated in a centrifuge and ultimately sold for cattle feed as distillers grains. The residue liquids are then passed through the evaporating process to leave a corn concentrate which is also sold as cattle feed. These by-products form a high protein cattle feed which provides a valuable revenue stream to the overall production economics

The Rochelle, Illinois site has several favourable attributes for locating a large scale ethanol plant there, including:

An abundant corn supply - Illinois ranks second in US corn production with more than 1.5 billion bushels produced annually; the Plant will initially require 18 million bushels of corn when operating at full capacity;
Close proximity to markets - the Plant is, on its completion, expected to be the closest ethanol plant to Chicago, one of the largest ethanol markets in the United States.
The Company intends to exploit, through the good transportation infrastructure which the Plant will enjoy, the potential markets local to the site in Illinois, concentrating on the Chicago/Milwaukee area; transportation links - Rochelle is situated on an intersection of mainline rail systems.
In addition, the Plant can use Rochelles local rail system which connects into the main rail lines without incurring switching fees; close proximity to the rail to truck intermodal facility near Rochelle - this should bring significant truck traffic to the area and allow IRE to pick and choose among many possible subcontractors for transporting ethanol and distillers grains; and
the availability of utilities run by the City of Rochelle.

IRE has finalised terms for all third party contracts relating to the project.
Cargill Corn supply and risk management
United Bio Energy (UBE) Ethanol sales, distiller's grains sales and plant management
Fagen/ICM Design and construction of the plant