He said that following attempts by Mobil in New Zealand, Sasol in South Africa and Shell in Malaysia to establish GTL facilities between 1985 and 1993, researchers have been able to dramatically improve the economic viability of the syngas process.
"Although these projects were dismal financial failures, they provided some insight into the challenges facing researchers, in terms of plant scalability and identifying key areas for additional development."
Apart from these efforts, several other firms have been researching the process and have announced encouraging developments over the past two to three years. Among them are Exxon, Syntroleum, BP Amoco, Williams Energy Corporation, Rentech and Arco.
"The world has an abundance of natural gas resources, which beg for technology that could accelerate their monetisation. It appears likely that by the end of this decade, giant gas refineries will become a predominant reality."
GTL technology involves indirect chemical conversion of natural gas via the synthetic gas or syngas process. The process converts the gas to a range of products that are clear liquids at room temperature and termed 'synthetic crude' or 'white crude.' The end result is a mixture that includes gasoline, diesel, naphtha and other light hydro-chemical liquids.
These can then be further refined into the various petroleum products using traditional refining technology. However, white crude will be exempt from much of the processing necessary for crude oil because it constitutes the purest form of refinery feedstock.
During the oil shocks of the 1970s, there was renewed interest in the process worldwide as an alternative to high oil prices and increased gas availability. But efforts waned again with the subsequent collapse of oil prices, only to be revived in the last two years as prices again rose and technological advances put commercialisation within reach.
The earlier plants had investment costs in the range of US$70,000-$100,000 per daily installed barrel and required crude prices of US$35-$40 per barrel for viability. In addition, the project will be uneconomical with gas feedstock prices higher than US$0.50/mmbtu.
Ongoing research has been able to reduce this investment to below US$40,000 per daily installed barrel and a GTL project can be viable with oil prices as low as US$25 per barrel.
"This compares favourably with the investment cost of a modern refinery," says Baisden. "The strategy of GTL developers is to target areas that have abundant stranded gas reserves which can offer relatively low gas prices and stable political and business environments."
The problem with designing GTL projects is its scalability. The largest single train ammonia or methanol plants built to date do not require more than 80 MMscfd of natural gas feedstock capacity. Conversely, the lowest capacity of the three leading commercial GTL processes available - the steam methane reforming (SMR) process - requires throughput of at least 100 MMscfd to be within its viable range.
The other two syngas processes require even higher scales. The partial oxidation of methane process (POX) uses between 200 and 300 MMscfd and the auto thermal reforming process (ATR) requires 300 - 1,500 MMscfd.
"In this regard, the syngas generation step is by far the most capital-intensive part of the GTL process, accounting for 60 percent of the overall investment cost. Hence, a major reduction in the syngas generation capital cost would have a significant impact on GTL economics and could be crucial for the full commercialisation of GTL production technology."
The actual Fischer-Tropsch synthesis process, whereby syngas is converted into medium and long chain hydrocarbons called syncrude, is largely the significant unproven technology in the GTL process.
The reaction takes place under moderate temperatures (200-300 °C) and pressure (10-40 bars) and typically uses iron or cobalt catalysts. The conversion per pass is low, thus requiring high recycle ratios to increase yield. The length of the hydrocarbon chains formed during the conversion depends on the syngas feed composition, the temperature and, in turn, the catalyst employed.
Additional revenues or savings can be generated with the by-products of the process, thus adding to the viability of the GTL option. An important commercial by-product is heat.
Prior to the syngas feed entering the reactor, it must be cooled. In the process the heat, when transferred to water forms steam, which can be sold directly or converted into power.
In addition, the conversion process separately generates considerable amounts of water, which can be purified for domestic use.
All three co-products - steam, power and water - can be sold if ready local markets are available and can contribute to defraying operational costs.
As a senior executive in Trinidad and Tobago's National Gas Company, Baisden noted that assuming the barriers to technology, cost and scale are overcome, other site specific advantages will place Trinidad in a favourable position to attract successful investments in a GTL production facility. These include competitive labour cost and gas prices, adequate reserves, established industrial infrastructure, easy access to world markets, the availability of a local market for by-products, state facilitation and feedstock opportunities for the local oil refinery.