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Gas-to-liquids technology attractive to major oil companies, entrepreneurs Exxon Production Research Co. works on proprietary GTL process; Alaskan Natural Gas to Liquids Co. would use Sasol process developed in South Africa Kristen Nelson PNA News Editor
Gas-to-liquids technology produces a product which can be shipped through conventional oil pipelines and two companies were promoting the technology for Alaska’s North Slope stranded gas in January. Dan Mendell, president of Exxon Production Research Co., talked to the Alaska Support Industry Alliance’s Meet Alaska conference Jan. 22 about Exxon’s proprietary process. The following week, the Alaskan Natural Gas to Liquids Co. said it had established an office in Anchorage to promote a GTL plant at Prudhoe Bay using the Sasol process used in South Africa. Is it economic? The international consulting firm of Arthur D. Little Inc. evaluated GTL technology in 1998 and concluded that Exxon, Sasol and Shell all had technically viable and economically competitive technologies at plant capacities exceeding 50,000 barrels per day in locations with low construction and natural gas costs.
“Scale (the bigger the better), location and gas price are the keys to success,” Tim Partridge, vice president of Arthur D. Little Canada told PNA last year.
Partridge, who directed the study, said the Middle East, Russia and parts of Latin America were the most attractive places for GTL projects. Alaska, he said, was not considered because of comparatively high construction costs. Exxon’s AGC21 process Exxon’s proprietary process, Mendell said, is called AGC21, advanced gas commercialization for the 21st century. “This process is technically ready today for commercial application.” And, he said, “technology advances have significantly reduced the cost.” Why the interest for Alaska? Because, he said, “we all know there is no economic commercialization option for Alaska’s gas today. We don’t know what the right answer will be for Alaska, so Exxon is continuing its efforts on all fronts to develop the most viable gas commercialization option.”
“Exxon in currently heavily involved in evaluating a GTL application in Alaska which addresses site specific issues such as gas composition, the Arctic environment, infrastructure sharing and a state’s fiscal systems,” he said.
“The liquids from the advanced gas conversion process are extremely clean,” Mendell said, noting that “GTL diesel easily exceeds the strictest California air resources board diesel specs. Initially, it could be used as a blend stock to upgrade conventional diesel properties for environmental and cost benefits.”
Exxon’s technology, Mendell said, “is particularly attractive for large-scale projects in the 50,000-100,000 barrels per day range.” Exxon is not operating a commercial GTL plant, but ran a 200 barrel per day demonstration plant in Baton Rouge, La., for 3 years, he said, and recently completed a 15 barrel per day syngas generation unit and hydrocarbon synthesis unit to provide data to help reduce the cost of future plants.
Costs of construction and operation in Alaska would be crucial factors, he said, but GTL liquids could be delivered to Valdez through the trans-Alaska pipeline either commingled with crude oil or in separate batches and transported by conventional ships. And, Mendell said, “because we are entering the liquids market the long-term …agreements associated with LNG sales are not required.” Sasol technology for North Slope The Alaskan Natural Gas to Liquids Co., headed by Dick Peterson, opened an Anchorage office earlier this year to promote a 50,000 barrel per day GTL plant at Prudhoe Bay using the Sasol process. “The Angtl project,” Peterson told PNA, has “an agreement with Sasol that brings their slurry phase distillate process to Alaska for the project.” A 50,000 barrel per day GTL plant at Prudhoe Bay would produce diesel and naphtha products which would be batched to Valdez in the trans-Alaska pipeline system.
The 10,000 barrels per day of naphtha would be sold to the Far East for petrochemicals, Peterson said, and 40,000 barrels per day of “environmentally superior diesel” would go to the West Coast market.
The Sasol process, Peterson said, developed by the Sasol company in South Africa, is the only commercial process in the world today. Sasol has produced more than 700 million barrels of diesel and gasoline products from the process he said, provides more than 40 percent of the energy needs of South Africa and has been doing this for 45 years.
Peterson said that the advantage of GTL over LNG is that you can build GTL facilities in stages and can enter the market gradually. “We think the ideal size is 50,000” barrels a day, he said, 40,000 of diesel and 10,000 of naphtha. The diesel would displace existing producers, but with only 40,000 barrels a day this wouldn’t be a problem he said. Five years down the road, when the plant was up and running, this volume would fill a void and wouldn’t negatively affect price by displacing other diesel. Fifteen to 20 years down the road, he said, you could have as much as 300,000 barrels per day capacity in GTL plants on the North Slope and extend the life of the pipeline.
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