|
Exxon looks at $3 billion GTL plant on North Slope Gas-to-liquids product would be shipped through trans-Alaska pipeline in batches; if work began this year, first shipments could be in 2009 Kristen Nelson PNA News Editor
Exxon Mobil Corp. has spent a lot of time and money since the 1970s trying to determine a commercial market for Alaska North Slope gas, and the company has ruled out both a gas pipeline and liquefied natural gas.
Gas to liquids, a process on which the company holds some 400 U.S. patents, is the economic path ExxonMobil sees for North Slope natural gas, Robbie Schilhab, ExxonMobil’s Alaska gas development manager, told PNA.
Schilhab said that ExxonMobil, along with the other major North Slope gas owners BP and ARCO, have been interested in developing gas since the 1970s.
Originally, he said, the companies focused on a gas pipeline, with upwards of $110 million spent by Exxon alone studying, doing engineering evaluations and conceptual engineering. But after that work, the companies couldn’t determine that a gas pipeline was commercial.
An LNG project has also been studied by the gas owners, Schilhab said, to the point where ExxonMobil feels it is not economic at the current time.
ExxonMobil’s GTL research ExxonMobil has done a lot of research on gas-to-liquids, and has spent some $400 million on GTL research, Schilhab said, bringing the technology forward and up to where it could be a commercial, viable project. Most of that research has been done at ExxonMobil’s Baton Rouge, La., refinery.
That demonstration unit is a very sizeable plant, Schilhab said, and has been modified and has tested a lot of different processes and the prospects of the technology are exciting.
GTL technology is highly proprietary, he said: ExxonMobil has some 400 patents in the United States, about 1,500 worldwide, for gas-to-liquids technologies.
Focus recently, Schilhab said, has been on making gas-to-liquids technology a viable project and taking that to the North Slope with a GTL plant. ExxonMobil has conceptual engineering under way for a 70,000 barrel to 100,000 barrel a day GTL plant with a price tag of more than $3 billion.
Timeframe about nine years Schilhab said that if everything fell into place and ExxonMobil started permit applications this summer and also began discussions with the state on a fiscal system for taxation, it would take about nine years to get the necessary permits, design and construct and begin the process. Startup, he said, could be about 2009.
Once infrastructure is in place, he said, the process could be sized up by adding a second or even a third plant of the same size.
With the volume projected, Schilhab said, GTL would really help improve throughput on the trans-Alaska pipeline, extending its life.
The life of the plant would be at least 30 to 40 years.
“There’s ample supply of gas up on the North Slope and so once you start a plant … it really depends if there are other gas projects … as to how many plants you would build,” Schilhab said.
Additional plants would be justified on their own merit, he same. Some infrastructure build with the first plant would be in place to aid economy of scale. Storage tanks, for example, could be shared with other plants as well as the utilities, such as electricity generating capacity. The GTL process, he said, would be fueled with gas that would probably then generate electricity.
Schilhab said that ExxonMobil has enough gas that we could move alone if we wanted to do that, but, he said, “we would see this as very similar to other projects done over the life of the North Slope that we would probably work in concert with other North Slope owners…”
Legislation needed But legislation is needed before a GTL project can move forward because the state’s 1998 Stranded Gas Act, which allows a project to negotiate a fiscal system with the state, does not cover gas-to-liquids.
Schilhab said that technology would have to be equipped for Arctic conditions, with more of the processes enclosed. But that, he said, is mainly to protect the operators and some of the equipment because of the translation from a warm to a cold climate. Essentially, he said, the processes are pressurized closed systems that aren’t really impacted by weather.
As for the gas, Alaska North Slope gas is high in carbon dioxide, Schilhab said, and carbon dioxide is actually beneficial for this process.
The output includes several products, he said: “primarily high quality diesel with no sulfur and no aromatics so it’s quite a bit better than the motor grade diesel that’s produced right now.” One use of the diesel is to take it tot he West Coast “and simply blend it with diesels and that would upgrade diesels in use now.” The energy is about the same, the result would be cleaner burning, with between 10 percent and 40 percent less emissions, depending on which you’re looking at, mainly because you have no sulfur and no aromatics, Schilhab said.
The GTL would be produced on a daily basis, stored in huge tanks and pumped down the pipeline about once a week in a batch while other crude oils were diverted. Once the North Slope GTL tanks were emptied, he said, you’d go back to pumping ANS crude.
At Valdez, the GTL liquids would go into separate storage tanks and would be shipped in separate tankers. Some of the product could go to the West Coast, he said, and some could go to the Far East for chemical manufacturing.
ExxonMobil, he said, is continuing to work the technology with the goal of developing a very cost-effective process so that the overall cost is economic.
Asked about GTL production in South Africa, Schilhab said that developed when the country was under embargo and no crude oil was being shipped in. They had to do something so they gasified coal and then turned that into gas and into liquids. The government of South Africa, he said, basically built that industry and the government subsidy makes it economic.
| 