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Gas to liquid could be the answer for po... Web will be part of life for new genera... Window washers could be out of a jo... Lost in the deepening chasm of... |
Gas to liquid could be the answer for polluted world
The world's oil companies, with Sasol in tow, are examining technology to produce ultra-clean fuel from what was previously regarded as worthless gas reserves. ROBERT CORZINE reports
"It's possible that such a plant can be an alternative to a conventional refinery," says Jack Jacometti of Royal Dutch/Shell, which operates the $750-million gas-to-liquid fuel facility. The plant at Bintulu reflects growing belief in what has long been the oil industry's holy grail: to turn huge reserves of worthless remote natural gas - reservoirs too far from a market or too small to justify development - into an easily transportable high-energy liquid. Successful exploitation of the technology could allow oil companies to earn billions of dollars from sleeping assets. Bintulu, in Malaysia's Sarawak state, is a far cry from conventional crude oil refineries. Although natural gas is relatively low in potential, it is the cleanest hydrocarbon resource. Even the waste products are white, with the waxy consistency of petro-leum jelly, which some Shell engineers claim is drinkably clean, and a soot-like residue that can be used as a soil conditioner. But gas-to-liquid projects, which until now have not been seen as commercially viable, also pose potential problems for oil companies. Engineers believe further reductions in gas-to-liquid costs are inevitable. Conventional refineries could be made obsolete if governments took early action to insist on clean gas-based fuels. "The companies are scared to push the technology because governments might simply say this is the new fuel standard," says Terry le Roux, an industry consultant. But these fears have not stopped a flurry of activity this year among some of the world's biggest oil companies to position themselves in the gas-to-liquid fuels market. They are all seeking to use variations of a process based on the Fischer-Tropsch technology developed by the Germans in the 1920s. tional fuel sources, Sasol recently signed a deal with Qatar's General Petroleum Corporation and Phillips Petroleum Company to construct a gas-to-liquids plant in Qatar. Sasol said the joint venture formed part of its vision to achieve sustainable growth in selected global markets by leveraging its technology. The plant will make use of Sasol's Slurry Phase Distillate process technology to convert natural gas into approximately 20 000 barrels a day of naphtha and high quality distillate fuels. The plant could be ready for production in 2002. Sasol has also agreed with Statoil, Norway's state petroleum company, to study whether its version of the process, developed during the apartheid era, could be adapted to offshore oil and gas platforms and production vessels. Exxon, the biggest US oil company, is in talks to build a large plant in Qatar, but is reluctant to talk publicly about its plans. The Gulf state is keen to develop new markets for its offshore North field, the single largest gas reservoir in the world and among its cheapest sources. Exxon is also considering a plant in Alaska to be built in conjunction with British Petroleum. Most of the other big oil companies are also investigating the technology. In the US, Syntroleum, a small Oklahoma- based company, has been aggressive in publicising technology that could be used on a smaller scale than that envisaged by Shell and Exxon. Syntroleum intends to offer this to bigger companies under licence. The small units would be useful in ending the practice of flaring unwanted gas in offshore oilfields - a major contributor to the emission of greenhouse gases. The key to commercial viability of gas-to-liquid fuel plants is the technologies' modern innovations - especially the cobalt-based catalyst over which the gas is passed at high pressure and temperature. Shell engineers at Bintulu say that marrying new technology there to the Fischer-Tropsch process initially proved difficult but that the plant, which has been operating since 1993, is now working about 97% of the time. "In the last three years we've learnt more than in the 15 previous years of research," says Saw Choo Boon, managing director of Bintulu. Engineers say the lessons will provide big cost savings on future plants. The pace at which these proliferate will depend more on economics than technology. "With $20 oil prices (the 1996 average) you have a fighting chance to realise such a project," says Jacometti. But some industry analysts believe such plants could be viable with oil prices as low as $15 a barrel if combined with a power station or desalinisation facility. Sasol estimates the total cost of a facility at between $25 000 and $30 per daily barrel of production - or about $300-million for a 10 000 barrel-a-day plant. That is roughly twice the cost of a conventional refinery but, as Cavan Hill of Sasol notes, feed-stock costs of a conventional refinery are between about $16 and $18 a barrel; remote gas plants would only have to bear the cost of extraction. Some expect the technology to proliferate quickly once the first plants have been built. "When it does happen, it will do so in a big way," predicts Simon Blakey of Cambridge Energy Research Associates. A report by consultants Wood Mackenzie estimates that half the world's proven gas reserves are located in remote areas that cannot economically justify the construction of pipelines; they would, however, provide a substantial base for a gas-to-liquid fuel industry. Until now, oil companies have viewed the discovery of remote natural gas as more of a nuisance than a resource. Unlike oil, which can be easily transported, gas requires a fixed infrastructure of pipelines or liquefaction plants and specialised shipping to take it to market. As a result, gas discovered in the course of oil exploration was often hushed up. Inside British Petroleum the announcement of a dry well was often accompanied by the statement: "The bad news is that we did not strike any oil, but the good news is there was no gas either." Not surprisingly, there are no accurate estimates of reserves. Areas as diverse as the Middle East, Russia, Alaska, south-east Asia and Latin America all contain substantial amounts of remote gas. If the new technology makes such areas commercially attractive, the reserve figures are likely to grow quickly. Apart from areas close to markets, such as the North Sea or the US Gulf of Mexico, little exploration has aimed solely at discovering gas. - Financial Times
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