abarrelfull wrote on 08 Mar 2010 10:59
Tags: associated compactgtl gas gtl velocys
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Last week the Houston Chronicle had
this article about Shell’s huge GTL project in Qatar.
Royal Dutch Shell Plc spent $19 billion to build the world's largest gas-to-liquids project, triple the original estimate. Now, it's pay-off time.
Thankfully for Shell, the cost differential between Natural Gas and Crude Oil is at record highs, making their overpriced Pearl Project potentially a major success. The problem is that anyone thinking today of making a similar investment cannot be sure that the market will be so much in their favour. They can however be sure that the capital costs will be high. How many other companies can afford almost $20 billion on a single project?
So is GTL just an oddity, that works for Shell in Qatar, but not really anywhere else?
It needs a large scale cheap supply of gas, far from consumers, and an investor with very deep pockets and strong nerves. So what would really change things is if we could make it work on a small scale. Then it would be suitable for smaller stranded reserves, and smaller companies.
That is the logic behind the Compact GTL business model.
Compact's business and strategy is focussed on providing a unique value creating solution to the costly problem of associated gas disposal in the upstream oil and gas industry. Compact's proprietary technology solution converts gas into synthetic crude oil, or syncrude.
The company is developing a GTL process that is small enough to be used to convert associated gas, and be installed on floating platforms. The resulting products can then be blended into the crude and transported using existing infrastructure.
This year they will be delivering a pilot plant to Petrobras.
CompactGTL the modular associated gas solution for oil and gas fields, has announced that it is on schedule to deliver a pilot plant to Petróleo Brasileiro S. A. ("Petrobras") in 2010. The 20 barrel per day pilot plant will be tested onshore in Brazil during the second half of 2010.
Interestingly enough, Petrobras has another option, for an even more compact solution.
Toyo Engineering Corporation and MODEC, Inc., which have been working together since November 2007 on the development of small- and medium-scale GTL, concluded a cooperation agreement with Petroleo Brasileiro S.A. to construct a verification facility.
The technology belongs to a third company, Velocys.
This is how they see themselves:
Velocys, Inc. is commercializing processing systems that provide energy and chemical companies with substantial capital cost savings, improved product yields, and greater energy efficiencies.
Their technology is based on microchannels, which allows very effective miniaturisation.
They have a good overview of potential and the technology involved here.
If these approaches can offer feasible solutions, the importance is huge.
It is currently estimated that 150-170 billion cubic metres (bcm) of natural gas per year are currently flared or vented globally from upstream petroleum operations.
That is 150 billion cubic metres of hydrocarbons which could be used rather than lost. That number also ignores the gas that is re-injected or used sub optimally just to avoid flaring.
Velocys calculates that a barrel of syncrude can be manufactured from about 185 cubic metres of gas. Based on this, a theoretical 1.5 million barrels per day of syncrude could be produced.
There are other imperfect options for capturing value from associated gas. This one separates the LPG out, LPG being relatively easy to transport.
The gas can be used to produce electricity, using turbines, great if you need the power, not so much if you don’t.
FLNG will be used in the future where the volumes allow it.
However, none of these have the comprehensive potential that small scale GTL does. If these companies can succeed in commercialising their technology, the problem of flaring or venting will turn into a big opportunity, and oil fields with significant volumes of associated gas will gain in value.
It goes to show once again how human ingenuity can increase the availability of natural resources.
