It’s not alchemy. Cheap and abundant methane can be converted to more valuable diesel and gasoline (and many other materials) via “gas to liquids” (GTL) processes. Most GTL approaches utilise the Fischer-Tropsch approach, but other chemical methods show promise of economic viability.
North America’s natural gas boom is attracting a number of GTL players — both large and small. Sasol — from South Africa — aims to invest up to $15 billion in a GTL plant in Louisiana:
The logic behind Sasol’s big capital spend is relatively simple: Sasol is making a bold bet that natural gas in the U.S. will remain relatively cheap compared to oil on a BTU basis. Since 2009, the price ratio of crude oil to natural gas has spread significantly, with oil gradually rising, while natural gas has remained relatively flat.
… With the help of Shell’s Middle Distillate Synthesis (SMDS) process, which carries over 3,500 patents, both Qatar and Malaysia are among the few with success in building viable [GTL] plants. Qatar’s Pearl project began in 2012 and produces 140,000 b/d, while Malaysia’s Bintulu plant, which began in 1993, produces 14,700 b/d. South Africa’s national oil company, PetrolSA, holds the distinction of operating the world’s first GTL plant, which began in 1992 and produces 22,000 b/d. __OilPrice (Chris Pedersen)
Smaller GTL players are also attracted to cheap North American natural gas.
Biofuels Power Corp. plans to build a small-scale plant to convert natural gas to synthetic crude on a former power plant site about 1o miles south of downtown Houston as it looks to capitalize on abundant supplies of cheap natural gas, the company announced Monday.
The gas-to-liquids plant is a pilot project, the first step in the Humble-based company’s plans to build several small plants at oil fields across the U.S. to capture and convert natural gas now stranded at well sites that don’t have processing or transportation infrastructure to carry the gas to market. __ Fuel Fix (Rhiannon Meyers)
If gas is cheap and the things you can make from gas are valuable, it makes sense to take advantage of the cost differential — if you have the expertise and raw material to proceed. Gas to liquids technology is old, but it is becoming more efficient and cost effective — which is why it is beginning to show up in more places now.
Approximately 4.9 trillion cubic feet (140 billion cubic meters) of natural gas was flared in 2011 according to the World Bank, and there are obvious environmental benefits for using small-scale GTL to reduce this figure.
However, the far more sizable prospect is stranded gas. Conservative estimates suggest that between 30 and 40 percent of the world’s natural gas resources are stranded, meaning that the resources are not technologically or economically feasible to develop. Small-scale GTL, in many cases, overcomes the barrier of economic infeasibility. When you add to this gas that is re-injected, it becomes easy to calculate a figure of in excess of 50 billion barrels of oil, readily available, that small-scale GTL can access. __ Rigzone (Grant Rudgley)
An even larger prospect for GTL than flared or stranded gas, is cheap and abundant shale gas — such as one may find in any number of North American regions. But it is the economics of GTL that will determine the number and size of GTL projects.
Velocys and CompactGTL, both based in the U.K., are working on gas-to-liquids plants with a maximum capacity of 15,000 barrels a day, which is about a 10th the size of Shell’s Pearl venture in Qatar, the world’s largest. Chevron Corp. this year started work on a 33,000 barrel-a-day Escravos plant in Nigeria, expected to cost $8.4 billion.
Even on a smaller scale, gas to liquids is expensive. The plants cost about $100,000 for each barrel of capacity to produce liquid fuels. Both companies say that they can make the business profitable. __ Bloomberg (Eduard Gismatullin)
Global GTL capacity has been estimated to grow at the rate of about 8% annually between now and 2018. That is not a monstrous rate of growth, but not all of the potential GTL players are satisfied that the economics of GTL will always be as favourable as at the present. In reality, the economics of GTL are likely to get better, as long as the rabid Russian bear is kept in its cage, and prevented from causing WWIII.
Turkey and Japan have signed a $1.7 billion GTL project with Turkmenistan. That is only the beginning, as huge and underdeveloped gas deposits are seen in the new light of GTL alchemy.
Liquified natural gas is natural gas that has been purified and cooled to liquid temperatures (-162 C or -260 F). This process reduces the bulk of natural gas to only 1/600 th of its previous volume. In that form it can be more easily shipped long distances by sea (and other forms of transport, depending upon safety regulations).
Natural gas liquids (NGL) are valuable short-chain liquid hydrocarbons that can be found in natural gas wells. The uses to which NGLs are put can be found in the table below:
With wiser global leaders will come the priority development of high temperature gas cooled nuclear reactors. These new reactors will be able to create massive new supplies of hydrocarbons of all kinds from any carbonaceous resource.
Lefty-Luddite Green Faux Environmentalists have squandered $trillions in a futile attempt to substitute wind & solar for carbon-based energy such as natural gas, oil, coal, etc. These corrupt carbonaceous politicians and activists might better be burned themselves as fuel, thus doing some good while thus being prevented from doing further harm. 😉