Presentation on theme: "The Promises and Limitations of Gas-to-Liquids Technology"— Presentation transcript:
1 The Promises and Limitations of Gas-to-Liquids Technology Global Forum on Natural GasMay 14, 2004Galveston, TexasIraj Isaac Rahmim, PhDE-MetaVenture, Inc.Houston, Texas, USADon’t forget low olefinFor 45 minute paper, APEC has diesel infoGive all referencesCopyright 2004 by E-MetaVenture, Inc. All Rights Reserved.
2 Gas-to-Liquid Technologies: Topics Commercial and historical background of GTLCurrent and planned GTL applicationsGTL chemistry, processes, productsKey GTL technologiesGTL CAPEX and economicsProduct Market Issues and Technology SynergiesE-MetaVenture, Inc.
3 Drivers for Chemical Conversion of Natural Gas using GTL GTL: chemical conversion of NG methane to liquid petroleum products of high quality including diesel and naphtha as well as specialty products such as waxes and lubesDrivers includeNeed for economic utilization of associated gasDesire to monetize significant reserves of non-associated and, particularly, stranded natural gas80% of the 5,000 TCF proven NG reserves are strandedReduction in cost of transport of NG from producing to consuming regions (same principle as with LNG)Environmental concernsThe development of clean fuels regulations throughout the world (gasoline, diesel, fuel oils)(Aside: GTL can be combined with gasification—coal, bitumen, petroleum coke)E-MetaVenture, Inc.
4 Natural Gas Transport Mechanisms After “Natural Gas Production, Processing, Transport” by Rojey et al.E-MetaVenture, Inc.
5 4.1 TCF Natural Gas Flared in 2000 Excluding FSU RegionBCF FlaredAfrica1,640Middle East923Central and South America569North America524Far East296Europe148After A. D. Little, Inc. Study (2000)E-MetaVenture, Inc.
6 Key US and EU Sulfur Specifications DIESELUS EPAEUWorld Wide Fuel CharterImplementation DateCurrent20062005Category 4Sulfur, wppm5001535050(1) (2)10Cetane Index4051 (#)57 (#)52/55 (#)GASOLINEUS EPA (3)EUImplementation Date20042006Current2005Corporate Annual Average12030Per Batch Cap3008015050Down to 10 wppm (“sulfur-free”) in 2004Many members have tax incentives to reduce sulfur to 10 wppmSulfur specs are phased in over time with full implementation by 2008E-MetaVenture, Inc.
7 Diesel Sulfur Specifications in Select Countries YearSulfur, wppmAustralia200650Hong KongUnder ConsiderationIndia (Delhi)Current500JapanCurrent/2005500/50MexicoRepublic of Korea200 Max130 Max (2002)E-MetaVenture, Inc.
8 Brief GTL History1922: Franz Fischer and Hans Tropsch used iron-based catalyst to convert an CO/H2 mixture to mixture of HCs and oxygenated compounds1925: used both iron and cobalt-based catalysts to synthesize HCsWW II: chemistry contributed to Nazi Germany war effort1950s-1990s: South Africa SASOL developed F-T commercially (in conjunction with coal gasification) to convert coal to HCs—total capacity 4,000,000 MT/year in three plants; two still in operation1980s-present: Shell using F-T to convert NG to fuels and waxes in Bintulu, Malaysia—recently increased wax capacity to approx. 500,000 MT/year along with diesel, gasoline, etc.1980-present: a number of entrants into the fields with projects announced and planned (including demonstration units), Qatar and Nigeria have started design and construction on world-scale GTL facilitiesE-MetaVenture, Inc.
9 Commercial GTL Plants in Operation CompanyLocationSize (BPD)CommentsSasol ISasolburg, South Africa5,6001955; Sasol technologySasol II/IIISecunda, South Africa124,0001955/1980; Light olefins and gasoline; Sasol technologyPetro SA (formerly Mossgas)Mossel Bay, South Africa22,5001991; Gasoline and diesel; Sasol technologyShell MDSBintulu, Malaysia14,000 (12,500 pre-1997)1993; Waxes, chemicals, diesel; recently revamped; Shell SMDS technologyE-MetaVenture, Inc.
10 GTL ChemistryProduction of synthesis gas (“syngas”) occurs using either partial oxidation or steam reformingPartial oxidation: CH4 + 1/2 O2 CO + 2 H2 (exothermic)Steam reforming: CH4 + H2O CO + 3 H2 (endothermic)Other possible reactions:CO + H2O CO2 + H2CH4 + CO2 2 CO + 2 H2Fischer-Tropsch synthesisCO + 2H2 —CH2— + H2O (very exothermic)SEE GTL NEWS MAR03 PAGE 6 FOR DESCRIPTION OF PROCESS ISSUESE-MetaVenture, Inc.
11 Conceptual Routes for the Chemical Conversion of Methane After “Natural Gas Production, Processing, Transport” by Rojey et al.Problem: methane is stableCommercial routes: methanol, Fischer-Tropsch productsE-MetaVenture, Inc.
12 Key Steps in GTL Process Includes air separationE-MetaVenture, Inc.
13 More on Partial Oxidation Synthesis Gas Production CH4 + 1/2 O2 CO + 2 H2Combustion chamber at high temperature ( °C); no catalystSome key vendors: Texaco, ShellMain competing reaction: decomposition of methane to carbon black (due to high temperature, non-catalytic nature of the chemistry)Three process sections:Burner section where combustion occurs (with oxygen to avoid presence of nitrogen—nitrogen is desirable only when making ammonia)Heat recovery sectionCarbon black removal section: first by water scrubbing, then extraction by naphtha from the sludgeE-MetaVenture, Inc.
14 More on Steam Reforming Synthesis Gas Production CH4 + H2O CO + 3 H2Carried out in the presence of catalyst—usually nickel dispersed on alumina supportOperating conditions: °C, 3 MPaTubular, packed reactors with heat recovery from flue gases using feed preheating or steam production in waste heat boilersNew process combines steam reforming with partial oxidation—uses the heat produced from partial oxidation to provide heat for steam reforming; resulting combination is autothermicDeveloped by Société Belge de l’Azote and Haldor Topsøe (ATR process)Gases from partial oxidation burner are mixed with steam and sent to the steam reformerE-MetaVenture, Inc.
15 More on Fischer-Tropsch CO + 2H2 —CH2— + H2O (very exothermic)Competes with methanation (reverse of steam reforming) which is even more exothermic:CO + 3 H2 CH4 + H2OTo promote F-T over methanation, reaction is run at low temperatures: °C; pressure: 2-3 MPaCatalystsOperating conditions and chain growthReactor typesE-MetaVenture, Inc.
16 Iron v. Cobalt-Based F-T Catalysts Key catalyst types: iron or cobalt-based (though cobalt-based is becoming more common in new applications due to higher activity/selectivity)Cobalt is poisoned by sulfur—syngas is desulfurized to about 0.1 ppmv SIssue of stoichiometric ratios of H2 and COFrom Van der Laan (1999)E-MetaVenture, Inc.
17 MW Distribution in Raw FT products Degree of chain growth (MW distribution of products) is affected by operating condition, reactor design, catalyst selectivity, and contaminants such as sulfur and oxygenated compoundsFrom “Natural Gas Production, Processing, Transport” by Rojey et al.E-MetaVenture, Inc.
18 Comments on GTL Products All white oil or high value lube/wax productsNo bottom of barrelGTL Diesel likely to be used as blendstock and not separate fuelEP590 spec. issuesSeparate distribution chain cost prohibitiveSmall markets for lube and oil (e.g., total global wax market ~ 70 MBD)Overall emissions per barrel upon consumption similar to crude oilExample: lb/CO2 v. 1041GTL-FT emissions shifted to plant site (v. city)(Typical Products)Refined Brent (vol%)GTL-FT (vol%)LPG3Naphtha + Gasoline3715-25Distillates4050-80Fuel OilsLubes + Wax0-30After BP study (Euroforum, Feb. 2003)E-MetaVenture, Inc.
19 Key GTL Demonstration Plants CompanyLocationSize (BPD)CommentsBPNikiski, Alaska300Start-up 4Q02/1Q03; BP/Kvaerner/Davy Process Technologies; stated “working well” with good products Jan04ExxonMobillBaton Rouge, LAStart-up 1993; Exxon AGC 21Syntroleum/ DOE/MarathonTulsa, Oklahoma100Start-up Nov. 03; Syntroleum technology; products tested in DC and Denali bus fleetsConocoPhillipsPonca, Oklahoma400Start-up 1Q03; Conoco technology+ Additional 8 demo plants in US, Japan, Canada, Italy (<35 BPD)E-MetaVenture, Inc.
20 Some Key GTL Technologies (1) Nearly all have three key steps: syngas production, F-T hydrocarbon synthesis, waxy intermediate upgrading to lighter (D, G) productsDifferences relate to reactor design and catalyst technologySasol Chevron:South Africa plants have used Lurgi coal gasifiers to produce syngas and multitubular fixed-bed (3 MBD) and fluidized-bed reactors (110 MBD circulating, 11 MBD non-circulating) for the F-T stepJointly have access to the Texaco gasifierDeveloped slurry-phase distillate process (SSPD) with cobalt catalyst in 1990sCombined with Chevron product upgrading technology and partial oxidation syngasF-T designs tested and commercially available include circulating fluid bed (Synthol), multitubular fixed-bed with internal cooling (Arge), non-circulating fluid bed reactors (SAS), as well as SSPDE-MetaVenture, Inc.
21 Some Key GTL Technologies (2) Shell:Partial oxidation based syngas manufactureMulti-tubular fixed trickle bed reactors (SMDS)Recently expanded Bintulu after S/D due to air separation explosion (1997)ExxonMobil:AGC 21 includes fluidized syngas production (catalytic partial oxidation) coupled with slurry-phase bubble-column F-T and hydro-isomerization of waxy productPrimarily cobalt and ruthenium-based catalysts300 BPD GTL pilot plant operated in Baton Rouge since 1993E-MetaVenture, Inc.
22 Some Key GTL Technologies (3) ConocoPhillips:Catalytic partial oxidation syngas production processProprietary F-T catalyst and “high efficiency” reactor designPonco City, OK demonstration plant (1Q2003)BP:Compact steam reformer (1/40th conventional in size)Fixed bed F-T with more efficient catalystWax hydrocrackingAlaska demonstration plant (4Q02/1Q03)E-MetaVenture, Inc.
23 Some Key GTL Technologies (4) Syntroleum:Small OK-based technology firm; offers for licensingUses nitrogen in air to remove heat from syngas production (called ATR: autothermal reformer) does not need air separation unitReduced capital costFixed-bed or fluid-bed F-T (using cobalt-based catalyst) followed by hydrocrackingNew tack: small, barge-mounted plants; ~ 19 MBD (based on syn-jet DOD contract work experience)E-MetaVenture, Inc.
24 Some Key GTL Technologies (5) Rentech:Small Colorado company; offers for licensingFormerly had strong working agreement with Texaco (with access to the Texaco gasifier)Combined partial oxidation and steam methane reforming (SMR) for internal heat balanceIron-based catalyst and slurry phase processIron-based catalyst is less active than cobalt-based, but is more versatile and can process syngas from SMR, solid gasifiers (coal), or liquid gasifiers (refinery resids)Sasol also offers iron-based F-TE-MetaVenture, Inc.
25 Key Commercial GTL Plants in E&C CompanyLocationSize (BPD)CommentsSasol ChevronTexacoEscravos, Nigeria34,0002006 completion; FW; $1,200 MMSasol Chevron QPRas Laffan, Qatar (“Oryx GTL”)33,7002006 completion; Technip-Coflexip; $850 MM; studying increase to 100 MBD by 2009Over 50 other projects (total capacity ~2 million BPD) at different phases (study, planning, preliminary design) in African, Americas, Middle East and Asia, and Australia.E-MetaVenture, Inc.
26 GTL-FT CAPEX Reduction Due to Improved Technology Capacity differencesLube and wax manufacture v. no lube/waxFinancing structureShort-term v long-term (increased capacity) caseTechnology differencesCurrent claims in $25,000-35,000/Bbl rangeE-MetaVenture, Inc.
27 A 2001 Comparison of Capital Economics (1) After Oil & Gas Journal (March 2001)E-MetaVenture, Inc.
28 A 2001 Comparison of Capital Economics (2) Though many claims of technical advances have been made since 2001, many of these claims have already been incorporated in the above study assumptionsNeed to await Qatar and Nigeria plant completion and early operation results for meaningful/useful updatesE-MetaVenture, Inc.
29 Typical GTL Product Cost and CAPEX Breakdowns After Gafney, Cline & Assoc. (2001/2003)Note: feedstock price range due to local (stranded or near market) variationNote: Various claims of improvement in certain elements. e.g., BP claims significant cost reduction due to technology with smaller syngas sectionE-MetaVenture, Inc.
30 GTL v. LNG Economics—1BCFD GTL-FTLNGProduct Capacity~110,000 BPD~7 MMTPACAPEX (Full Chain)$2.2 B(mostly in producing location)$2.4 B($1.2 Plant)($0.8 Ships)(0.4 Regasification)Product Value$24-27/B$ /MMBtu$16-19/B$ /MMBtuEnergy Efficiency60%85%Carbon Efficiency77%After BP study (Euroforum, Feb. 2003)Question: how important is the energy efficiency difference between LNG and GTL?E-MetaVenture, Inc.
31 GTL Products Markets and Growth Potential (1) Analysts expect GTL diesel capacity of 500-2,000 MBD by 2020Qatar alone has projects with 900 MBD products in 6 plants planned by 2010 (very optimistic)(Projected global diesel demand in 2020: 40 million BPDGrowth in GTL capacity has been slower than optimists of mid-90’s expectedLNG has proven to be a fierce and dominating competitor for capitalRecession of late 90’s and low crude prices ($8-15/Bbl)Many still consider $25,000/Bbl capital to be border line competitiveOne source: <$20,000/Bbl to compete with LNG; <$12,000/Bbl to compete with refining (perhaps too pessimistic)Slow pace of negotiations due to technical/economic unknowns, issues of financial/regulatory stability, and evolving financing structuresE-MetaVenture, Inc.
32 GTL Products Markets and Growth Potential (2) Is there a premium on GTL diesel?Higher quality with lower S and aromaticsMost studies assume 5-10 c/gal premiumRegulatory incentive might need to be a factor in some casesIn December 2000, US classified GTL product as “alternative fuels” under the EPACT 1992tax implicationsAppears to only apply to US manufacturingEU is considering similar measureLNG v. GTL product marketsGTL feeds directly into transportation fuels with a very large marketLNG has certain demand constraints due to relatively small marketE-MetaVenture, Inc.
33 GTL Products Markets and Growth Potential (3) Manufacture of clean fuels (low sulfur) in refineries is another key competition for GTLMany US, EU, and other refineries are in the process of installing, enlarging, or otherwise improving hydrotreating and hydrocracking capabilitiesSignificant new technological improvements are making refinery clean fuel conversion quite cost effectiveSpecialty products (waxes and lubes)High quality products with proven commercial track record (Bintulu)Key: very small marketsExample: the global wax market ~ 70 MBD with ½ food grade (2003)E-MetaVenture, Inc.
34 GTL Products Markets and Growth Potential (4) What to do?Approach GTL from an NG disposal angle. Examples:Syntroleum small barge-mounted plantsSiberian associated NG as bottleneck to increased oil productionEnvironmental restrictions (specially flaring reductions) will continue to be a key driverLikely the world will wait until 3-4 initial projects are into operation before evaluating next stepsPotential to move rapidly into 2nd generationContinue technical and commercial advances; take advantage of synergiesE-MetaVenture, Inc.
35 A Word on SynergiesMuch analysis and R&D/developmental effort in improving GTL economics by taking advantage of synergiesPetroleum coke, coal, oremulsion (bitumen in water, similar to #6) gasification (CTL)Hydrogen recoveryPower generation (combined cycle).Recent development: ConocoPhillips has acquired E-GAS—an integrated gasification combined cycle technology (best demo: pet. Coke and hi-S coal unit since 1995)Integration with methanol and olefin productionRecent development: completion of 5000 TPD Atlas methanol plant in TrinidadAll suggest that, under some circumstances (geography, feedstock availability and pricing, markets, etc.) returns improveNearly all cases require higher capitalCoke, coal, bitumen, refinery bottoms require the more flexible iron-based F-T catalyst (Sasol, Rentech)E-MetaVenture, Inc.
36 About the Speaker E-MetaVenture, Inc. Iraj Isaac Rahmim is a specialist in petroleum technology and economics. He holds B.Sc. and M.Sc. degrees from the University of California and a Ph.D. from Columbia University, all in chemical engineering.Currently the president of E-MetaVenture, Inc., he was previously employed with Mobil and Coastal corporations. His early career in Mobil Corporation involved responsibilities for the development and commercialization of a variety of process technologies ranging from clean fuels and light gas upgrading to FCC and resid processing. Later with Coastal Corporation, he was responsible for identifying, assessing, and championing novel business and technology opportunities and solutions for integration into the company’s petroleum and petrochemical assets. Recent key activities include bitumen recovery and processing technologies, gas-to-liquids technology and markets, Tier II refinery modifications, and training and litigation support. A recent study on medium to long-term gasoline storage contributed to the California Attorney General’s report on gasoline pricing.Dr. Rahmim is the president of the Houston, Texas, Chapter of International Association for Energy Economics, a long-standing member of the American Institute of Chemical Engineers, an associate member of the State Bar of Texas (Oil, Gas, and Energy Resources Law Section). He holds a number of patents in refining technologies, has authored papers in a variety of technical areas, and has presented in and chaired sessions at national and international conferences.E-MetaVenture, Inc.
37 Contact InformationIraj Isaac Rahmim, PhDE-MetaVenture, Inc.Energy Consulting Practice6214 Memorial DriveHouston, TexasUSATelephone: USA (713)Fax: USA (509)E-MetaVenture, Inc.