GTL adds value to gas production

Distributed GTL plants could provide economic monetisation of shale gas, associated gas and stranded gas

Neville Hargreaves
Oxford Catalysts Group

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Article Summary

With an estimated global resource base of over 800 trillion cubic metres, natural gas is projected to play an increasingly important role in the global energy economy. But with much of the gas in the form of unconventional gas — such as shale gas, tight gas and coal bed methane — and associated or stranded gas, the challenge is to find ways to take advantage of this potentially abundant energy resource economically and in an environmentally responsible way. Currently, much stranded gas (gas fields located far from existing infrastructure) is simply left in the ground, while associated gas (gas produced along with oil) is disposed of by reinjection back into the reservoir at considerable expense, or by the wasteful and environmentally unfriendly practice of flaring, which is subject to increasing regulation. Meanwhile, many shale gas developments are being hampered by low gas prices, which result in marginal economics for quite a few discoveries.

The gas-to-liquids (GTL) process offers a potentially attractive way to improve the economics and thus enable production of all of these unconventional gas resources. For a start, like liquefied natural gas (LNG) and compressed natural gas (CNG), GTL densifies the energy to make it cheaper to transport. In principle, GTL products can be transported in existing petroleum infrastructure.

What is more, by converting gas into more valuable products, including diesel, kerosene and naphtha, GTL also adds considerably to its value. For example, 10 000 standard cubic feet (scf), worth $30 at the wellhead in many locations in North America -— or even less if it cannot be easily taken to market — can be converted into a barrel of oil products worth $100 as crude or even more as finished fuels. Also, in contrast to gas, oil is an internationally traded product that can be transported by a number of means. Since oil is similarly priced around the world, GTL can act as both a hedge and an arbitrage opportunity for gas producers, such as those in North America, who are faced with persistently low gas prices (see Figure 1).

Distributed option
The GTL process involves two operations: the conversion of natural gas to a mixture of carbon monoxide (CO) and hydrogen (H2) known as syngas, followed by Fischer-Tropsch (FT) synthesis to convert the syngas into a waxy product that can be used to produce a wide range of hydrocarbon-based products, including exceptionally clean-burning diesel and kerosene (see Figure 2).

In conventional GTL plants, the FT synthesis is carried out in large fixed-bed or slurry-bed FT reactors, which are designed to work on a very large scale. They require a large capital investment to set up and are only economically viable for plants producing around 30 000 b/d of liquid fuel. Examples of existing GTL plants, including the Sasol Oryx and Shell Pearl GTL plants in Qatar, operate on a vast scale. The Sasol Oryx plant in Qatar, for instance, cost around $1.5 billion to construct and is designed for production levels of 34 000 b/d. Shell’s Pearl plant, also in Qatar, cost around $18-19 billion to construct. It has an ultimate design capacity of 140 000 bpd GTL product, and 120 000 b/d natural gas liquids, and is expected to produce about three billion barrels of oil-equivalent over its lifetime. Only about 6% of the world’s known gas fields are large enough to sustain a GTL plant of such a size, and the majority of potential undiscovered gas finds are thought to be below 1 trillion cubic feet (tcf), an amount too small to make conventional GTL plants economic.

However, another option being developed — distributed GTL plants for the economical production of ultra-clean liquid fuel at or near the production site — does show great promise for improving profitability of smaller-scale gas deposits. The secret of success in the distributed plants lies in the use of small-scale microchannel or mini-channel FT reactors designed to operate efficiently and economically when producing as little as 500 b/d of FT products. As well as being smaller — an important consideration for offshore and remote applications — distributed GTL plants offer more flexibility to scale production to match the available resource. For example, in the distributed GTL technology developed by Velocys, part of the Oxford Catalysts Group, several skid-mounted microchannel reactor modules can be linked together in parallel to increase production volumes. Microchannel FT reactor-based distributed GTL plants are able to produce up to 15 000 bbl/d of clean 
liquid fuels economically and efficiently.

With small-scale distributed GTL, the great challenge is to find ways to combine and scale down the size and cost of the reaction hardware, while still maintaining sufficient capacity. This, in turn, depends on finding ways to reduce reactor size in order to intensify the syngas generation and FT processes. Achieving this relies on developing ways to enhance heat and mass transfer properties in order to increase productivity. Since heat transfer is inversely related to the size of the channels, reducing the channel diameter is an effective way of increasing heat transfer and thus intensifying the process by enabling higher throughput. For use on offshore installations, the equipment also needs to be able to withstand high-intensity wave motion.

This is the basic logic behind the approaches being taken by the two main players currently working to develop small-scale GTL systems: Velocys and 
the UK-based company CompactGTL. Although both are developing integrated SMR/FT systems and are working on the basis of the same principles, the solutions they have come up with are different.

In essence, both companies are developing modular solutions that combine SMR and FT, and both have found ways to reduce the size of the hardware. In standard SMR and FT processes, the reactions are carried out in 2.5-5 cm (1-2 inch) diameter tubes, or channels. In the integrated two-stage system being developed by CompactGTL — which the company says is designed to incorporate modules weighing less than 25 tonnes and producing 200 b/d of liquids per module — the SMR and FT reactions are carried out in a series of mini-channels, typically less than 10 mm across, each containing low pressure drop catalyst-coated metallic foil structures. In contrast, the Velocys system for distributed GTL takes advantage of microchannel technology to shrink the hardware and intensify the processes. In this developing field of chemical processing, chemical reactions are intensified by reducing the dimensions of the reactor systems. This reduces the heat and mass transfer distances, and enables reactions to occur at rates 10-1000 times faster than in conventional systems.

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