An outlet for stranded gas ‘GTL is poised to become an increasingly important component of the world’s energy supply’, according to the US Federal Reserve’s chairman, Alan Greenspan, who proffered this view in a recent speech to the National Petrochemicals and Refiners Association. Gas-toliquids is suddenly very much in the news, with announcements of a series of commercial plants being built in Qatar. All the large oil companies are involved in researching and developing GTL technology and now governments are getting interested because they see GTL as a potential new source of oil product supplies at a time when the world is worried about the sustainability of growth in conventional oil production.
The basic conversion from gas to liquids is a fairly straightforward process, although a variety of specific technologies are currently in use or being developed by different companies. Two main steps are involved.
• The production of synthetic gas (syngas) from natural gas (methane) by a process known as reforming.
• The conversion of syngas into liquid products.
The feedstock of natural gas usually undergoes pre-treatment to get rid of pollutants such as sulphur that will damage catalysts in the conversion stage and the final products may need further processing to produce saleable products that are comparable with those produced from a conventional refinery. All the conversion processes currently in use are based on the chemical scheme known as the Fischer-Tropsch reaction.
Fischer-Tropsch technology, although long established, is still evolving as companies develop their own methods of production with a range of catalysts and different operating conditions to produce different combinations of synthetic products. For example, the ExxonMobil technology is designed to produce significant volumes of base feedstocks for lubricants, whereas Shell has concentrated on maximising the yield of diesel fuel. In general, high temperature processes produce predominantly gasoline and light distillates while lower temperatures processes yield mainly kerosene and diesel streams.
Until now, the only two ways of bringing gas supplies to the consumer on a commercial scale have been to move it by pipeline or ship it in tankers as LNG. If GTL technology is to become economically viable it will have to be competitive with these alternatives, or complement them in some way. Up to 80% of world gas reserves are classed as ‘remote’: that is, they are too far from large centres of gas demand to make delivery by pipeline feasible. In these remote fields, the economics of GTLs compete directly with those of LNG.
A GTL plant produces a range of synthetic oil products that will have to be sold on the market at prices equivalent to products derived from crude oil. The cost of producing GTL diesel must therefore be comparable with the cost of making high quality diesel in a conventional refinery. ChevronTexaco suggests GTL diesel can be produced for $14/bbl, while Shell estimates it can be done for $15-$20/bbl. This compares favourably with refinery costs that are dominated by the cost of crude input (currently in the range $40-$55/bbl). However, no commercial GTL plant is yet in operation and production cost spreads remain no more than best estimates