Commerical GTL Plant to Supply 1000 BPD of Products From Natural Gas
With the increasing supply of natural gas in recent years, gas-to-liquids for diesel and jet fuel is looking attractive to companies like Calumet Specialty Products.
While natural gas supplies are now abundant in North America, the clean energy source is not a good direct substitute for all petroleum products. Engines that use jet fuel and diesel fuel, for example, would need modification to use natural gas. Converting the natural gas to a ‘drop in’ fuel solves many problems. Creating feedstocks for lubricants, solvents, and waxes is also useful.
Enter GTL. Using a high-temperature reformer technique, natural gas can be converted to a synthesis gas which can then be turned into these consumer-ready products via Fischer-Tropsch (FT) chemical reactions. This gas-to-liquid process is not magic and the energy cost is high, but as long as the natural gas feedstock price is low enough it makes commercial sense.
Against that background, Calumet Specialty Products Partners LP announced in a Sept 6 press release that it plans to expand its Karns City, PA specialty products facility to include a nominal 1000-barrels-per-day GTL plant. Calumet is a specialty petroleum products manufacturer, operating 135,000 bpd of refining capacity in the United States, and producing some 1500 different products.
“Converting natural gas into ultra-high quality feedstock through GTL will reduce our costs, increase security of supply and improve product quality,” said Calumet's Vice Chairman and Chief Executive Officer Bill Grube in the press release.
Calumet has commissioned Ventech Engineers, LLC, specialists in modular petroleum processing plants, to design and deliver the GTL plant using an Autothermal Reformer (ATR) from Haldor Topsoe Inc and Fischer-Tropsch (FT) technology from Velocys Inc., according to Calumet. Haldor Topsoe's ATR will reform the natural gas into synthesis gas, a mixture of largely hydrogen and carbon monoxide. In the GTL plant, this synthesis gas will be routed through the Velocys FT process for conversion into long chain hydrocarbons. Velocys is the US-based subsidiary of the UK-based Oxford Catalysts Group, according to Oxford.
“Due to the historically large gap between high oil prices and low gas prices in North America, we're experiencing very strong interest from potential clients keen to take advantage of this arbitrage opportunity. We are confident of the coming growth of GTL in North America and elsewhere, and of playing a leading role in this emerging market,” said Roy Lipski, CEO of Oxford in announcing its own involvement in the project.
The plant design is expected to be completed by late 2012, followed by site specific engineering and a decision to commence fabrication in the first half of 2013. Production is currently expected to begin in the second half of 2014. The entire plant will be constructed as truckable modules at Ventech’s fabrication facility in Pasadena, Texas, and then transported to Calumet’s site in Karns City for rapid installation and interconnection with the existing refining facility.
As long as there is a price difference between natural gas and oil that is large enough, GTL will remain attractive. The biggest issue is the volatility in the price arbitrage. Oil prices can drop significantly and natural gas prices may rise—the current low prices may not last.
Still, others such as the South African company Sasol are seriously looking at GTL. They are 12 months into an 18 month study that might lead to a $10B investment in a massive GTL plant in Louisiana, according to The Wall Street Journal (9/14/2011, Lefebvre)
Sources: Calumet and Oxford