- GTL means Gas to Liquids.
- A whole range of fuels can be produced from Natural gas by partial oxidation to synthesis gas (a mixture of H2 and CO) and subsequent conversion of this gas • 1993 – Shell pioneered the GTL business at their Shell Middle Distillate Synthesis Plant in Bintulu.
- In this plant Naphtha, Kerosene and Fischer Tropsch Diesel (FTD) were produced apart from other specialized products
Gas to Liquids: A New Frontier for Natural Gas:
- The relatively high world crude oil prices have drawn attention to the potential for developing previously uneconomical natural gas reserves, such as associated gas or stranded gas.
- Converting these resources to liquids – either to liquefied natural gas (LNG) or to petroleum liquid substitutes, such as diesel, naphtha, motor gasoline, or other products (such as lubricants and waxes) by employing “gas to liquids” (GTL) technology – could provide a way to bring these gas resources to market.
- GTL has recently become attractive as an option for monetizing stranded gas and complementing traditional commercialization opportunities such as LNG or pipeline transportation.
Gas to Liquid – Commercial Viability
Gas to Liquids: Economics
- The economics of GTL continue to improve with advances in technology and scale.
– Capital costs have dropped significantly, from more than $100,000 per barrel of total installed capacity for the original plants to a range of $25,000 to $30,000 per barrel of capacity today.
– Moreover, Royal/Dutch Shell has commented that it expects to be able to reduce the costs to below $20,000 per barrel.
– By comparison, the costs associated with conventional petroleum refining are around $15,000 per barrel per stream day after several decades of technology improvements.
- The high oil prices of recent years have made transportation fuels produced through GTL technology commercially viable.
• Few companies release the detailed costs of their GTL conversion technologies.
• According to ConocoPhillips, assuming that the cost of natural gas is $1.00 per million Btu, GTL fuel is cost competitive with diesel fuel at world oil prices above $20 per barrel.
GTL – FTD – Advantages:
- Among the different GTL products, the diesel fraction is highly valued in the downstream market because of its unique properties that meet environmental regulations
– The GTL fuel reduces emissions relative to conventional diesel, as it contains near-zero sulfur and aromatics.
– GTL fuel also exhibits a high cetane number that enhances engine combustion performance
– Because they are compatible with existing vehicle engines and fuel distribution infrastructures, GTL fuels are the most cost-effective in reducing emissions among the non-conventional fuels
Gas to Liquid Plants
At present, worldwide there are at least 9 commercial GTL projects at various stages of planning and development
- for the period 2009 to 2012 that could bring to market an additional capacity of 580 thousand barrels per day.
- More than 19 additional proposed projects could double that capacity beyond 2012
- Initiated by companies operating in gas-rich countries – Qatar, Iran, Russia, Nigeria, Australia, and Algeria – where natural gas can be developed at a cost of less than $1.00 per million Btu.
Gas to Liquids – Major Initiatives
- Qatar’s North Field, with an estimated 900 trillion cubic feet of natural gas reserves, and the adjoining South Pars field in Iran with an estimated 500 trillion cubic feet of reserves, are the cheapest natural gas resources in the world
- For other countries, such as Nigeria and Algeria, GTL complements their LNG industries
- offers promise for use in Nigeria to convert natural gas that would otherwise be flared.
– Huge capital investments
– Project financing
– Availability of qualified contractors and operators
Gas to Liquids – Major Initiatives – Qatar
- Six of the nine confirmed GTL projects are located in the state of Qatar as joint ventures
– Based on an integrated development and production sharing agreement (DPSA) with major international oil companies.
– Foreign companies have favored this approach, because it gives them an opportunity to book part of the gas reserves on their balance sheet and support their upstream and downstream activities
– By 2011, Qatar is set to produce about 394,000 barrels of GTL products per day or 68% of total planned GTL capacity
- Have established a favorable climate in terms of transparent business and investment policies.
- Stable tax regulations
- Enforcement of formal agreements
- Government’s willingness to protect foreign investors through its legislature.
- Stable political climate
- Developed infrastructure and Service
- Provides guarantees for the safety of foreign employees
- Potential for future development through expansion of existing facilities.
- Qatar reached agreements with a group of financial institutions to fund their gas-related projects in exceed $60 billion
– Developed a master plan to expand its port
– Double the size of Ras Laffan Industrial city from 39 square miles to 77 square miles,
– Accommodate 7 GTL projects, 16 LNG trains, 5 gas processing plants, 6 to 7 ethylene plants, and a variety of other gas-related industries.
– By 2012, Qatar must produce nearly 25 billion cubic feet of natural gas per day to support its commitments.
– 10.3 bcf/day to produce 77 millions metric tons of LNG p. a
– 4 bcf/day for the 394,000 barrels per day of GTL
– 5 bcf/day for petrochemical, local power, and industrial projects
– 2 bcf/day for exports through the Dolphin pipeline.