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Report predicts gas-to-liquids growth Marathon ready to start Oklahoma demonstration plant next month Larry Persily Petroleum News Juneau Correspondent
While BP’s gas-to-liquids demonstration plant at Nikiski continues to turn out about 180 barrels per day of clean fuel, a recent study by an international energy consulting firm says growing GTL production worldwide could supply 5 percent of diesel demand by 2010 in North America, Europe and the Pacific Rim.
In keeping with that increased focus on GTL as a growing supply of clean fuel, a new demonstration plant was dedicated earlier this month near Tulsa, Okla.
The 70-barrel-per-day plant is scheduled to start operations in early November. The facility is a joint venture of Tulsa-based Syntroleum Corp. and Houston-based Marathon Oil Co., with $11.5 million in financial aid from the U.S. Department of Energy.
The plant was designed and constructed under the department’s Ultra-Clean Fuels program, which is aimed at developing new fuels to reduce emissions from cars and trucks. The virtually sulfur-free fuel from the Oklahoma plant will be used for a long-term test in fleet vehicles, including public buses in Washington, D.C., and National Park Service vehicles. Two years from approval to start-up Federal funding for the plant was approved in July 2001, with construction start-up in August 2002. The facility consists of three main components: An autothermal reformer to convert the natural gas feedstock into synthesis gas (hydrogen and carbon monoxide); a Fischer-Tropsch unit to convert the synthesis gas into synthetic crude oil; and a refining unit to upgrade the crude into diesel fuel.
“With commercial application of GTL technology, we can tap natural gas and coal reserves that are currently stranded and sitting idle and turn them into new sources of clean fuels,” said Carl Michael Smith, assistant secretary for the Office of Fossil Fuel at the Energy Department.
In addition to the BP’s demonstration plant in Alaska and the soon-to-open test plant in Oklahoma, several full-scale GTL production facilities have been proposed worldwide that could significantly boost the 200,000 barrels per day of existing production, said consultants with Gaffney, Cline & Associates, with principal offices in the United Kingdom, Houston and Singapore. Qatar GTL plant likely to be next The 41-year-old consulting firm points to Sasol/Qatar Petroleum’s proposed 34,000-barrel facility in Qatar as most likely to be among the first new GTL plants to come online.
“A desire to minimize natural gas flaring around the world could present opportunities for GTL projects … (and) the tightening of refined-product sulfur specifications in the world’s major transportation fuel markets could also help the quest of GTL project developers,” the company said in a summer report commissioned by the Japan National Oil Corp.
The consultants added, however, that they do not expect to see large-scale government subsidies for GTL fuels.
The market will drive GTL production, they said. “Sufficient market demand growth should exist to support diesel production from GTL facilities, new refineries and incremental additions to refineries, such that GTL diesel volumes should have little problem being placed into the market.” Capital cost a major issue Cost will continue to be an issue, the report said. Producers, such as BP at its Alaska plant, are working to bring down the per-barrel cost of producing GTL fuels, and the report offered its own cost-based prediction. “Should the drive to reduce GTL project capital costs to $20,000 per barrel per day or lower be realized, the development of the industry should expand greatly.
“Indeed, at such a point, the prospect of developing GTL projects to monetize smaller gas reserves may become more feasible.”
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