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GTL: More Than Just a Pipe Dream?

Converting natural gas into a liquid has been possible for a long time but has not been cost effective. This environmentally-friendly technique is finally becoming more viable, at all scales
This article appeared in Vol. 14, No. 4 - 2017

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Gas-to-Liquids, commonly known as GTL, involves the transformation of natural gas into synthetic oil, which is easily conveyed by tanker or pipeline and can be used instead of conventional oil both in the petrochemical industry and in transportation infrastructure. GTL products are colorless and odorless, and contain almost none of the impurities like sulfur, aromatics and nitrogen that are typically found in mineral crude oil. Since natural gas burns much more cleanly than oil and is also more abundant, developing this technology would appear to offer an important step in the future of energy supply and towards a cleaner environment. But, at least until recently, the main barrier to the mainstream use of GTL has been the complexity of the process – and therefore the cost. 

100-Year-Old Technology 

Changing natural gas into a liquid is not a new idea; in fact, synthetic fuel production technology was invented in the 1920s, when the most common technique, the Fischer-Tropsch (F-T) synthesis, was first developed. This was used in Germany in the 1930s and particularly during WWII, when the country was finding it difficult to source conventional oil and refined product supplies. By 1944, Germany was using F-T technology at an industrial scale, with nine plants producing about 14,000 bpd. 

Pearl GTL is the world’s largest plant turning natural gas into cleaner-burning fuels and lubricants. (Source: Shell.com) South Africa was next to work on GTL technology, when anti-apartheid sanctions prevented the country from importing oil. Using coal as the feedstock, by the 1950s South Africa was producing several thousand barrels of synthetic oil a day, developing a number of plants over subsequent years; this is referred to as 2nd generation GTL technology. 

The technology continued to evolve, with gas becoming the preferred source. A number of major companies were at the forefront of this 3rd generation GTL development, including Shell, which built the Bintulu GTL plant in Malaysia in the 1990s. The company now operates the world’s largest GTL plant, Pearl, which is capable of producing 140,000 barrels of GTL products each day, as well as 120,000 bpd of natural gas liquids and ethane. 

The commercialization of this technology is still evolving, and there are only a handful of large, fully commercialized plants in the world, all complex and expensive to build and run. The main barriers to efficiency appear to be the low productivity of the Fischer-Tropsch reactors, short catalyst lifetime, by-products such as organic acids and heavy alcohols which have to be dealt with and, most importantly, the need to build petrochemical plants to turn hard waxes produced by the standard F-T method into marketable products. 

Methods of producing liquids from gas outside the F-T process, without the use of catalysts, have also been developed, in which air or oxygen is burned together with natural gas at high temperatures and pressure to cause particle oxidation, but these have yet to be proved commercial. 

Therefore, although the F-T process is now nearly 100 years old, the cost of GTL, in small-scale operations at least, remains very expensive. 

  • Franz Fischer (a) and Hans Tropsch (b) invented the technique named after them which converts gas or coal into synthetic liquid fuel.

  • Franz Fischer (a) and Hans Tropsch (b) invented the technique named after them which converts gas or coal into synthetic liquid fuel.

Breakthrough to 4th Generation 

An innovative Houston-based company believes it has found a solution to unlock the economic efficiency of the GTL business. INFRA Technology has developed new catalysts which allow synthetic fuels to be produced with no by-products, directly from the Fischer-Tropsch reactor without the wax stage, leading to significant cost savings – potentially up to 50% of the CAPEX of conventional GTL technologies. The process is uniquely optimized for the production of clean hydrocarbons without oxygenates, thus reducing further waste management issues. We are now looking at the 4th generation of GTL technology – and a major step forward towards commercialization of this process at all scales. 

INFRA’s technology is differentiated by the use of a unique proprietary pelletized cobalt-based catalyst in the F-T stage of the process, using a modularized tubular fixed-bed reactor, with the catalyst packed inside the tubes. The F-T reaction is carried out at constant temperature as cooling water is circulated on the shell side to maintain the reaction at isothermal conditions. The produced water is collected and reused for the auxiliary and steam system. The waste heat generated from the F-T block by the reactions and the energy absorbed by the F-T cooling water cycle at high temperature and pressure is industrialized, generating enough power to supply the motor-driven equipment. This has all led to a dramatic improvement in efficiency. 

The clear synthetic crude produced mixes well with mineral crude for a number of uses, and by offering slightly different catalysts to suit the preferred liquid product composition, the INFRA F-T process can directly deliver distillates like naphtha, diesel and jet fuel which do not contain impurities such as sulfur, nitrogen, tar or carcinogenic aromatic hydrocarbons. 

Another advantage of the technology is a reduction in the size of the reactor, making modular and scalable plant design economically viable. From its small demonstration pilot plant in Texas INFRA Technology can produce more than 100 barrels of synthetic oil (60/40 mixture of gasoline and diesel fractions with a high share of jet fuel) from 1 MMcf of gas per day, which it believes can ensure a positive NPV for GTL plants on a standalone basis even for small-scale facilities. INFRA has designed a modular transportable gas-to-liquids unit which has a footprint of only 400 m2, which can be placed on an onshore drillsite or offshore platform to convert flared associated gas into liquids and can also be easily relocated to another site. 

  • INFRA Technology process. (Source: INFRA Technology)

Advantages of Low Cost GTL 

Right now, more than 16,000 gas flares are burning associated gas at oil production sites worldwide, causing about 350 MMt of CO2 and other pollutants to be emitted into the atmosphere every year. As well as being bad for the environment, this wastes resources which could be used. In 2015 alone over 5 Tcfg was burnt through flares at production sites – enough to supply the entire continent of Africa with electricity for a year, according to the World Bank. The installation of small, low cost GTL units at wells or clusters of wells which use the gas to directly produce synthetic oil that can be transported and sold using existing networks instead of flaring could be an important and economically viable route to tackling these emissions. As an added bonus, GTL technology can cope with CO2-rich gas, the presence of which can make a field unviable; in fact, up to 25% CO2 in the feed actually increases productivity. 

Stranded gas – discoveries remote from any market or in other ways economically unviable – represent almost a third of the world’s proven gas reserves. At the moment either gas pipelines or LNG terminals and tankers are the most feasible options, but both are expensive and complex in construction, operation and maintenance for all but the largest resource deposits. Immense pipelines, transmissions stations, gas liquefaction terminals and liquefied gas tankers together result in an extremely expensive infrastructure, meaning that for many projects, the transportation of the product itself can make the entire field development project unprofitable.

The ability to install a compact, cost-efficient GTL system which does not require additional energy input or produce polluting by-products is a way to unlock and monetize such stranded gas resources. This is particularly relevant for developing countries without established infrastructure systems. The economic efficiency of INFRA’s GTL production in remote areas is demonstrated by its use in Russia, where the most effective projects, which have a financial internal rate of return of 16.5–25%, are in inaccessible areas like Sakhalin, Novy Urengoi, and Surgut. 

Similarly, the burgeoning shale gas industry can benefit from small-scale GTL technology by converting gas into synthetic crude at the source, offsetting high production costs with a good value-added product and eliminating the need for gas transportation infrastructure, thus adding to the potential for these resources. 

Moving away from hydrocarbons, small-scale GTL technology has tremendous potential in the bio-resources field, as existing technologies do not allow for the production of transportation fuels from these sources. If bio-gas is being produced, either from agricultural and forestry products or biologically derived waste, such technology can help make it more economically viable while also providing a new source of clean and renewable energy. 

Synthetic fuels have been shown to have a number of benefits, including lower emissions and enhancements in engine performance, a very important factor when considering the level of air pollution in many cities. This fuel is completely free from the toxic impurities produced when cars burn mineral motor fuel, producing only steam and carbon dioxide, and is compatible with existing diesel and petrol engines, as well as transportation infrastructure and gas stations distribution systems. 

There are many implications in the use of small-scale GTL technology for countries keen to strengthen their national energy independence through the diversification of energy sources, as well as offering more import and export options through a larger range of transport routes. 

  • GTL technology can be used in conjunction with bio-gasification technology to economically provide a new source of clean and renewable energy. (Source: INFRA Technology)

Future Looks Promising 

By producing high quality synthetic oil that does not require hydrocracking or upgrading, through a very efficient process, INFRA Technology believes that for the first time in history synthetic fuel production has become profitable. Having proved the technology by opening the first commercially feasible GTL plant in Texas, which demonstrates the modular, transportable GTL idea, the company is now looking to develop larger projects which, through economies of scale, will be not only economically viable, but cost-competitive with oil refining, thus bringing natural gas and bio-resources to the crude oil and transportation fuels markets. There are ongoing discussions with Petronas in Malaysia to develop a floating GTL plant, and a feasibility study is underway for a GTL plant in the Nenetsk region in northern Russia, which will produce winter diesel fuel and high-octane gasoline from the natural gas of the Vasylkovskoye gas condensate field. This will enable the region to become self-sufficient in diesel and gasoline, significantly reducing the current expensive cost of transporting fuel to this remote northern region. 

It looks as though the efficient production of synthetic fuel is finally both feasible and profitable and is destined to become the rule rather than an exception.

  • INFRA Technology opened its first commercially feasible GTL plant in Texas in December 2016. (Source: INFRA Technology)

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