What's new in production

A long-term fascination with gas-to-liquids (GTL) technology, as an elegant solution to the stranded gas problem, motivates this highly selective survey of players and processes involved in a production niche of ever-growing importance. Those of you with a similar interest are aware that, in general, the well-known and established catalytic chemical process, Fischer-Tropsch (FT) synthesis, at work in large-scale GTL plants, has been considered difficult to scale downward in its “off-the-shelf” form, to a size that is economical for stranded-gas applications.

But, not to worry—a number of companies have been beavering away at solutions that are scalable to a size suitable for dealing with stranded gas. Today, we look at a few. But first, let’s consider the problem, nicely defined by one of these players, Gas Technologies: “By definition, stranded gas cannot be delivered to market, either for economic or logistical reasons. Stranded reserves can be too small or too remote to warrant a pipeline, or loaded with enough contaminants that pre-treatment costs make the project economically unattractive.

“Though ‘proven’ geologically,” continues the company, “stranded reserves cannot be included in the bookable value of an asset without an economically viable method to deliver product to market. The hit to your bottom line is three-fold: Lost acquisition and development dollars; unrealized revenue potential; and lost ‘bookable reserves’ that could potentially be leveraged for other operations.”

Single-step GTL conversion. Gas Technologies’ solution is a non-catalytic GTL technology that converts methane to methanol in one step, which they claim is an economic, gas conversion platform for small-scale producers. According to the company, the process is designed to monetize small-scale sources of stranded gas, from 50 Mscfd to 30 MMscfd, which they say represent 80% of the global stranded and flared gas market.

Because the process is catalyst-free, it can process a wide range of off-spec feed gases, without costly pre-treatment. The company says that in [most] cases, from gas produced at biodigesters and landfills to associated gas flared at oil wells, the process accepts methane feedstock, as is. The company claims that “[the] process eliminates the syngas step and associated catalyst by converting methane directly into methanol via a patented, direct homogenous, partial oxidation process. The system [uses] an energy-neutral recycle loop, where unreacted methane is scrubbed and recycled until the desired conversion is achieved. The carbon and thermal efficiencies of the resulting process are comparable to syngas-based technologies.”

Small-scale GTL process—key steps. CompactGTL has established, and tested at lab scale, the key steps required for a small-scale GTL process. The company defines these steps as:

• High availability
• Suitability for oilfield conditions
• Deployable in remote locations
• Maintainability
• ASME VIII code-compliant and certifiable equipment
• Mass-produced
• Suitable for onshore and offshore deployment and use
• CAPEX and OPEX fall within the ranges required for economic viability
• Oil company demonstration of fully integrated process at meaningful scale.

The core technology is said to adopt plate-fin heat exchangers to form the structure of its modular, Steam Methane Reforming (SMR) and Fischer Tropsch (FT) reactors. This allows precise control of heat and gas flow over the process catalysts, in a regular array of thousands of closely-spaced channels. These so-called “mini-channels” are about 3-10 mm across. Catalysts are inserted directly into plate-fin heat exchanger channels, a process made viable by the simple geometry of the exchanger and the practical cross-sectional dimensions of the channels.

Smaller scale GTL, in a low-oil-price world. According to Velocys, it still makes sense. The company claims that its technology could unlock an untapped market of up to 25 MMbopd, from stranded conventional gas, shale gas or associated gas that would otherwise be flared or reinjected. The company notes that tighter regulation of gas flaring and fuel emissions continues to favor the market’s development, and it expects that, as oil prices rise, the mainstream market will become more accessible, as project opportunities based on the oil-gas arbitrage return.

Several economically-attractive opportunities continue to exist for smaller-scale GTL, according to the company:

• Where a low-value feedstock is available (associated gas, landfill gas, waste biomass or coal).
• When a plant could serve a remote market, where fuel import costs are high.
• Where a plant could satisfy a demand for high-value specialty products.

They note that large-scale GTL projects, forced to locate in more accessible locations on the coast, will be affected more by a sustained period of low oil prices. Also, the majority of gas resources worldwide are too small to support conventional GTL or LNG facilities. Smaller scale GTL (producing between 1,500 bpd and 15,000 bpd of liquid fuels from 15–150 MMcfgd) has the potential to unlock these reserves, which are physically or economically inaccessible.

Other companies deserving of a mention are also doing intriguing work. For example, Greyrock is developing and commercializing proprietary catalysts that enable economic, downward scaling.

The inability to monetize stranded gas is certainly a problem, but flaring will, ultimately, cause more long-term economic harm—in the form of a highly negative view by policy-makers and the public—of a practice that they see as careless. Progress, to reduce and ultimately eliminate it, should be seen as very good news, indeed.