Small Scale GTL Plants Emerge to Convert Low-Priced Natural Gas to High Value Refined Products

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There have been some interesting developments in Fischer-Tropsch (F-T) Gas-to-Liquids (GTL technology), especially for resources where the quantity of natural gas available will not support world-scale plants. Both Sasol and Shell have commercialized their respective GTL technologies in large-scale projects; Sasol in Qatar’s 33,000 bpd Oryx project, which started up in 2008; and Shellin Qatar’s 140,000 bpd Pearl project which achieved full production at the end of 2012. GTL is the process that converts natural gas to high-quality liquid products such as gasoline or diesel.

However, the projects of current interest are those companies such as Velocys and Compact GTL- that are targeting small scale opportunities, in the range of 3,000 – 15,000 bpd projects, for their technologies. The difference in high quality products produced via GTL and other methodsThey exist today in the distributed unconventional gas production and gas associated with oil production.

Velocys (www.velocys.com), previously known as Oxford Catalysts Group Plc, has a microchannel F-T reactor system, originally developed at Battelle Memorial Institute then spun off as Velocys. Its technology was successfully tested in a 6 bpd skid-mounted pilot plant at Petrobras’s Lubnor refinery in Fortaleza. Their first commercial plant was announced in July as a joint venture with Waste Management, NRG Energy, and Ventech to be located on Waste Management’s East Oak land fill site in Oklahoma. To date, no capacity has been identified other than that the project will contain several of their full scale modular F-T reactors. Project completion is projected for mid-2016. Velocys also recently acquired Pinto Energy, which was building a 2,800 bpd project in Ashtabula, Ohio, based on Marcellus and Utica Shale gas as feedstock and using Velocys F-T technology to produce liquid products.

Compact GTL’s (www.compactgtl.com) F-T technology is aimed at utilizing associated gas in remote or deepwater environments. They also had an agreement with Petrobras for the testing of a 20 bpd pilot plant which was subsequently moved onto one of Petrobras’s floating production platforms. They have announced a 3,000 bpd project in Kazakhstan with expected completion in 2017.

Another small scale GTL project is the Juniper GTL 1,100 bpd project in Westlake Louisiana. Venture partners are SGC Energia SA of Portugal and Houston-based Great Northern Project Development LP. Calumet Specialty Products Partners LP has recently acquired a 22% share in the $135 million project. The project includes the renovation of a moth-balled steam methane reformer to supply the required synthesis gas for the F-T process. Completion is scheduled for 2015.

One of the driving factors for these small scale GTL projects is the abundant quantities of stranded and associated natural gas whose volumes are too small for the world scale GTL projects in the 30,000 – 100,000 bdp range.  However, these under-utilized and low valued natural gas resources could present profitable opportunities by converting them to very appealing, high-quality liquid products, diesel, gasoline and lube oils, using these small scale GTL technologies.

Keep an eye on these small scale GTL projects as they develop over the next few years to convert low priced natural gas to higher value refined products.

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Marshall Frank

Marshall E. Frank retired from Chem Systems, where he was President and Managing Director, responsible for international consulting activities in North and South America and Asia Pacific. During his more than thirty years with the company, he had technical and administrative responsibility for a large number of multidisciplinary projects, both single-client and multi-client sponsored. Mr. Frank’s areas of expertise include natural gas utilization and conversion, the petrochemical industry, the refining and petrochemical interface, and alternative fuels. He also directed Chem Systems’ Financial Practice, which provided assistance to lenders in assessing the various risks associated with the financing of major international energy, petrochemical, and polymer projects. Prior to joining Chem Systems, Mr. Frank was involved in process evaluation, process engineering, and the startup of many of Halcon/SD’s proprietary processes at Scientific Design Company. Mr. Frank received a B.S. in Chemical Engineering from Cornell University.

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