Has Australia missed the GTL boat?

Back in the early 2000s, gas-to-liquids (GTL) was the big topic at petroleum events around Australia. Gas-rich, but oil-poor, Australia was seen as the ideal destination for the introduction of GLT technology.

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Based on the Fischer-Tropsch process developed in the 1920s by German chemists Franz Fischer and Hans Tropsch, GTL converts synthetic gas into liquid hydrocarbons. The process was critical for German fuel production in WWII.

Fifty years later, the Australian federal, state and territory governments saw GTL as an answer to overcoming the nation’s liquid fuel shortages and were happy to outlay tens of millions in taxpayer money to buy special licences and hand out free land sites to GTL specialists. Then, PM John Howard was enamoured.

The big guns in the oil and gas sector, such as Shell and Chevron, were also trumpeting the potential to turn stranded Australian gas discoveries into high-value liquids. It was also promoted around the world as a cleaner alternative to mineral oil products while also helping nations overcome oil shortages.

In 2001, Shell proposed an Australian GTL plant that could potentially turn gas into 75,000 barrels of liquid fuel a day. Chevron and South African partner Sasol also put forward a case for an Australian development.

Both proposals failed to get off the ground, although Shell and Chevron-Sasol were able to establish successful GTL plants in Qatar and South Africa, respectively.

While local politicians were keen to see GTL plants established here, high development costs and the easier path to LNG eventually held sway. Now with petrol stations running out of supplies and oil prices skyrocketing, a local GTL industry would again be very popular with politicians and motorists – but it may be too late.

The Lowy Institute recently noted Australia is critically dependent on liquid fuels for national survival, and it again raised the option of GTL technology as a solution to a dangerous and increasingly likely fuel security contingency.

The urgency for an alternative fuel option ratcheted up even further with forecasts that Australia’s domestic crude oil stocks may run out by as soon as CY30.

In what was an interesting foresight, the Australian Strategic Policy Institute noted back in August CY25 that the country’s vulnerability to fuel disruption remained one of the most significant risks to the nation’s resilience and that GTL offered a strategically sound and technically proven solution.

“Despite years of policy reviews and public investment in stockpiles and refinery subsidies, we remain overwhelmingly reliant on imported refined fuels, with shrinking domestic capacity and limited onshore reserves,” the institute wrote.

“This is a national weakness that threatens critical infrastructure, commercial continuity and sovereign capability.

“With defence already under financial pressure, now is the time for the private sector, resource industry, and state and territory governments to step up and lead the commercial development of GTL production.

“If backed by clear policy signals and targeted infrastructure investment, Australia could establish an independent fuel capability within five years − one that delivers resilience, regional development and long-term export potential.”

The Institute noted ~90% of Australia’s diesel and aviation fuel comes from refineries in North Asia, and the nation’s onshore diesel reserves at that time were well below the International Energy Agency’s minimum threshold of 90 days.

With world-class discoveries being made in the Beetaloo Sub-basin and Taroom Trough, Australia is once again building on its dominant gas position; however, it would seem that a GTL answer for our oil supply issues has passed us by.

The Lowy Institute has also noted that while just one plant could provide a substantial number of barrels to help meet Australia’s requirements, if construction started in CY27, it wouldn’t be online until at least CY31.

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