logo

Back

Oct-2004

Engineering gas-to-liquids projects – Part 2

How GTL projects have evolved, from their inception through the various stages of engineering and study to the award of an EPC contract

Simon C Clarke, Foster Wheeler Energy Ltd

Viewed : 3679


Article Summary

As discussed in Part 1 of this article in the Summer edition of PTQ, GTL projects can consist of a variety of alternatives, with a common theme of high capital costs and high degrees of intensity and complexity. The range of projects that have been considered, or have been touted in the media, include stand-alone, multi-train enterprises of ~30000 to ~80000bpd in industrial cities and ~30000 to ~80000bpd in remote locations. In addition to these enterprises, there are also integrated projects of similar nature, but including some or all of gas plants, upstream developments and pipelines.

Other projects include smaller size facilities of approximately ~10000bpd aimed at specialities, as well as even smaller opportunities (<5000bpd), looking at specific niche opportunities or aimed at floating applications. All but the last of these have capital costs reported in the press ranging from around US$600 million for the smaller applications up to US$3 billion for the large integrated projects. Projects of this size, therefore, require careful consideration of the contracting strategy if limiting bid lists or large joint ventures (JV) are to be avoided (from an owner’s standpoint).

This leads to a whole series of contracting strategies that can be adopted. The selection of which is largely dependant on project size, preferences of the owner or owners and the owner’s ability to assemble a team, which can potentially manage multiple contractors, or requires an additional project management contractor (PMC) for assistance. If an integrated project is considered, then additional columns to the following tables can be added representing the upstream development, pipelines and gas plants, with similar scenarios also possible (including or excluding these components).

The ensuing discussion represents the main variations that can be considered, but hybrids of the various schemes to be discussed can be considered, and will have pros and cons in line with the parent schemes from which they are derived.

Proprietary technology
Before considering specific contractor variations, it is worth considering the issue of proprietary technology. It is a common feature within the GTL industry that the core three chemical conversion processes (syngas, Fischer-Tropsch, product upgrading) are considered in some way to be proprietary, and it is usual that individual contractors are associated with the engineering of these specific units. Scenarios include:
Technology company developed process. If a specific GTL project is licensing any of the technology steps, then it is likely that the technology provider at some point has an alliance with a specific contractor to engineer basic engineering design packages (BEDP) for the process unit. If this is the case, then this contractor selection will be fixed for this process unit.

Licensed “conventional” process. In this scenario, the GTL project may be using a more conventional technology for either syngas or product upgrading from one of the more established licensors. In this case, these licensors often have pet contractors with whom they always work (or a short-list of two or three approved contractors). Again in this case, the contractor selection for this process unit will be restricted.

Inhouse developed process. In this case, the GTL project owner has developed an inhouse technology solution for at least one of the processes. This is not unusual as a method of protecting one’s IP, to form an alliance with one contractor for engineering of the unit, the owner of which may wish to be different from any other contractors being used for the remainder of the enterprise.

With any of the these scenarios, it is therefore likely that the individual three core chemical conversion processes will be engineered by separate contractors, necessitating a multiple contractor execution strategy for at least the front end engineering and design (FEED) stage. In this case, the role of the party performing the overall integration of the process units (and interface coordination between them), together with integration and optimisation of the utility and offsite systems will be critical, with either additional contracting support utilised or performed by the owner’s team.

Single contractor responsibility
The single contractor responsibility strategy utilises a single contracting entity across the entire GTL project definition at each phase. The contractor used can be the same or different at each phase, with or without rollover or lump sum bids. This strategy, in the strict form presented in Table 1, is unlikely to be practical due to the technology aspect of contractor alliances. This strategy does provide several important benefits, including:
- Single point responsibility for all technical aspects of the project definition and execution
- No interface management, so no possibility of interface mismatch or schedule delays due to critical path activity delay across multiple entities
- The owner management team can be small, as most issues are internal to the single contracting entity
- Maximum opportunities for optimisation and integration, as all issues are the responsibility of a single entity
- Potential single location execution, again reducing owner costs, possibly improving schedule and reducing overall execution costs.

It must be remembered that having a single contracting entity across the entire project leads to certain issues, including the “all eggs in one basket” scenario, and its associated problems. Another important issue to take into account is that there will be a limited number of contractors with the required skill set across all elements of the GTL project, thereby limiting the contractor selection (this applies at all phases, but is most pertinent to FEED, where the majority of the process definition occurs).


Add your rating:

Current Rating: 1


Your rate:

  • Responsive image ProTreat® mass transfer rate based simulation
  • Responsive image NAPCON games transform the way you train
  • Responsive image FCC online diagnostic services for FCCU
  • Responsive image NeXRing™ NeXt big thing in random packing
  • Responsive image Corrosion control
  • Responsive image Bottom of the barrel upgrading
  • Responsive image Shut-off valves
  • Responsive image Opportunity Crudes Conference 2021 October 25-27
  • Responsive image Reactor Internals Knowledge Hub
  • Responsive image Atlas Copco Expander Compressors
  • Responsive image PROVALVE® Fixed Valve