Important Energy Intelligence Group article.....
The following article, written by Barbara Shook, is reprinted here with permission from the Energy Intelligence Group, energyintel.com , publishers of (among many things) The Oil Daily and Energy Intelligence Briefing. I believe this article came out Friday, 10/29/99. in the latter publication. A shorter version came out in The Oil Daily on 11/1/99.
Title: Texaco prepares to turn GTL technology into commercial project
After years of discussions and tests, Texaco and two Australian partners are preparing to apply the Fischer-Tropsch natural gas-to-liquids (GTL) conversion process to a commercial project that will combine a GTL plant with a coal-gasification facility and an electricity generation unit in Western Australia. The project will use the GTL process developed by tiny US Rentech that Texaco in 1998 licensed and Texaco's coal gasification technology to convert kerogen-laden lignite into electricity and middle distillates, primarily diesel for the Australian market. When operations begin, probably in 2003-2004, it will be the first commercial-scale GTL project since Shell's Bintula, Malaysia, facility in 1994 and the first to use lignite as a feedstock. The Shell plant converted natural gas into middle distillates until a Christmas Day 1997 explosion took the facility out of commission. Shell is rebuilding the plant. Texaco and the two Australian firms, Hillcrest Resources and Australian Power & Energy Holdings (APEC), are in formal joint venture negotiations for the $500 million Esperance Power Project. Preliminary plans indicate a 200-megawatt power plant and 6,000 barrels per day GTL plant, but those sizes are likely to be revised upward as the quality and quantity of resource are more clearly defined. The complex will be constructed in the Esperance-Salmon Gums area of Western Australia, about 350 miles southeast of Perth. Hillcrest already is negotiating with an unnamed major oil company to purchase the diesel for resale in the Western Australia market. Currently, the region uses more than 15,000 barrels per day of diesel. The GTL product, however, would be so-called "green" diesel, free of all sulfur and particulates. It could be used as either a direct-burning fuel or a blending stock to improve the quality of standard diesel. Potential power buyers also have been identified. The basic Fischer-Tropsch technology is more than 75 years old, developed by German scientists Franz Fischer and Hans Tropsch in the 1923. The first generation of the technology was used extensively by Germany during World War II to convert coal into transportation fuels and more recently by Sasol in South Africa in its coal-to-oil plants. The problems preventing wider application have been economic. Until the development of advanced catalysts, most based on cobalt, the process could not compete with oil priced below $30-$35 per barrel. Its uses to date have been limited to only situations where access to crude oil was denied by economic or political embargoes. Once the economic threshold fell to the $14-$16 per barrel range, a number of natural gas-fueled GTL projects were proposed. Exxon and a joint venture of South Africa's Sasol and US Phillips are working on deals in Qatar. Shell is considering a second project, this one in Bangladesh. Chevron and Sasol are developing a plant in Nigeria. Texaco has looked at a number of possibilities, including Trinidad, Brazil and northwestern Scotland. Exxon also is reviewing opportunities for platform-mounted facilities offshore Angola and may be close to announcing a 100,000 barrels per day plant for Alaska's North Slope. Another US technology developer, Syntroleum, has licensed its process to several engineering and energy companies. Most of the GTL processes include three steps. The first converts the hydrocarbon feedstock, either natural gas, coal, lignite, bitumen or refinery bottoms, into synthesis gas, a mixture of carbon monoxide and hydrogen. The Fischer-Tropsch stage transforms synthesis gas into waxy hydrocarbons, plus a small amount of byproduct light hydrocarbons and water. The third step upgrades the waxy hydrocarbons into middle distillates, primarily kerosene, diesel and gas oil, as well as naphtha. Depending on plant configuration, refinery feedstock may be produced. Rentech, the developer of the process to be used in the Australian project, has been working on its technology for almost 20 years. Former US Energy Department scientists formed the company almost 20 years ago to continue their research and find commercial applications for the process. Unlike most other GTL processes, Rentech uses iron-based rather than more expensive cobalt-based catalysts. While its process is covered by a variety of patents, much of the equipment and technology incorporated is off-the-shelf. The Texaco-Hillcrest Australian project is the second using the Rentech process to be announced in recent weeks. Earlier this month, the company signed a letter of intent with a Swedish engineering company that is expected to lead to a project that will convert industrial off-gases into high-grade, synthetic transportation fuels. Following the signing of definitive agreements, Oroboros AB of Goteborg, Sweden, will use Rentech's patented technology to convert waste gases from a steel mill to a super-clean diesel fuel. The Fischer-Tropsch project will convert 27 MMcfd of low-Btu waste gases, largely hydrogen and carbon monoxide, into about 1,500 b/d of synthetic diesel. Because the waste gases have a lower energy content than natural gas, the conversion ratio is not as efficient as the 10,000 cubic feet to 1 barrel typical in natural gas-fueled GTL plants. Other economies, however, more than offset the comparative inefficiencies, Rentech President Dennis Yakobson said. One is the low cost of the feedstock. In addition, this application will not require construction of a synthetic gas manufacturing plant, reducing the capital costs of the venture significantly. In a standard GTL plant design, the synthetic gas facility can account for 60% of the costs. Finally, the Rentech technology uses inexpensive iron-based catalysts, which are more suitable for poor-quality feedstocks such as off-gases than expensive cobalt-based catalysts. Oroboros indicated that the iron-based catalyst is one of the attractive features of the Rentech process, compared to other GTL technologies. The resulting diesel fuel will meet Swedish environmental standards, which are more stringent than even those of the California Air Resources Board. The Swedish government encourages the use of clean, alternate fuels through lower fuel taxes. The Rentech-Oroboros arrangement also will accomplish another Swedish environmental goal. By eliminating waste-gas flaring at the steel mill, Swedish carbon dioxide emissions will be cut some 200,000 tons annually. "Our ongoing efforts reflect the tremendous flexibility of Rentech's Fischer-Tropsch technology and the opportunity it affords Rentech to participate in projects around the world that will produce very clean fuels and products from coal, industrial off-gases, refinery bottoms and natural gas as Rentech seeks to evolve into a premier Fischer-Tropsch technology licensing company," said Dennis L. Yakobson, Rentech's president and chief executive.
Author: Barbara Shook |
