C rude oil, which powered the world so effectively through the
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last century is a finite commodity. Fortunately, the world has an alternative in the form of natural gas and, as luck would have it, the world's natural gas deposits represent an even greater energy reserve than crude oil The UK has already taken advantage of its North Sea natural gas reserves —its annual consumption rose from 11.4 to 84.5 million tonnes of oil equivalent between 1970 and 1997, mostly at the expense of coal.
The UK is fortunate in having so much natural gas so close to where it is needed: half of the world's proven natural gas reserves are unusable, simply because there is no economically viable way of getting the gas to market.
Natural gas does not lend itself to being moved easily by pipeline over great distances as it is compressible and potentially dangerous. It would be much easier to move if it could be turned into a liquid, and the most obvious way to do this is to cool the natural gas until it becomes a liquid at -160°C, but the liquefaction process and the vessels needed to store and transport the liquefied gas are expensive.
However, natural gas can also be liquefied by using gas-to-liquids (GTL) technology. This is a process of chemically converting natural gas, which is predominantly methane, into different hydrocarbon compounds that remain liquid at room temperature and pressure.
The process involves three stages. First the methane is broken down into carbon and hydrogen atoms, using steam and heat in the presence of a nickelbased catalyst to produce a mixture of carbon monoxide and hydrogen, called synthesis gas or 'syngas'. Second, the syngas is converted into long, waxy hydrocarbon paraffin molecules, which are then broken into shorter molecules that remain liquid at room temperature and pressure.
This second step, which is the key to the process, was invented in 1923 by the Germans Franz Fischer and Hans Tropsch. The Fischer-Tropsch process, as it is known, produces a synthetic crude oil known as 'syncrude which has many of the same properties as crude Oil and can be blended with conventional crude or fur _ ther refined in a third stage.
Syngas can be converted directly to methanol which in turn can be easily converted to petrol or an octane
enhancing additive. It could also be used in the first commercially viable fuel cell-powered vehicles, as it is can be stored on board as a liquid and, with the aid of a reformer, converted into the hydrogen gas needed by the fuel cell.
Early converts
Syncrude is sulphur free and contains negligible levels of heavy metals and poNaromatcs. It can be refined to make extremely high quality diesel (which gives rise to lower exhaust emissions than reformulated diesel) or used to dilute and clean other liquid streams.
Crude oil prices have trebled to more than $30 a barrel in the past 18 months, and they could go higher still if demand continues to outstrip supply. The oil companies, however, view the rise as a glitch and prefer to think in terms of an average price of around $18.
But even at this pnce the expensive GTL technology begins to look viable. Not surprisingly, a number of oil companies are taking more than a passing interest.
BP is excited about the role GTL could play in tapping the commercial potential of the huge North Slope gas field by 2006-2010, but stresses that it will also develop a competitive LNG export option. BP says GTL and LNG are not mutually exclusive as there is enough gas to support both approaches.
Nonetheless, BP has been developing GTL technology since the early 1980s at a number of research centres including its UK pilot units in Warrensville and Hull, and is unlikely to stop now. The difference between GTL and LNG is that GTL converts methane into different hydrocarbon compounds, while LNG is merely methane in its liquid form.
If the temperature of LNG goes above -160T it quickly reverts to methane in gas form.
BP says that with current technology about 35% of the energy value of methane is used in converting it to syncrude/diesel, compared with a figure of about 12-13% to produce LNG. However, BP points out that GTL is an emerging technology so it expects significant improvements in energy efficiency in the future. Also, according to some estimates, GTL syncrude is $2-$5 a barrel more valuable than regular crude oil, and it can use existing transport systems with no need for the new investment needed to handle LNG.
Since 1996 BP has been working with the Norwegian company Kvaerner Process Technology, a leading designer of syngas reformers, on a project to reduce the cost of production. BP says the first stage of the GTL process, the reforming stage, accounts for more than half the capital cost—it believes the BP-Kvaerner design will reduce the reformer cost by up to 50%.
The innovation developed by BP and Kvaerner involves the use of a smaller-than-normal reformer to make syngas. The technology has been demonstrated in the laboratory and in pilot units: the Nikiski plant will prove if it can work in the real world (see below). Through this experience BP hopes to learn enough about the technology and its costs to find out if larger, commercial-scale plants would be economically viable on the North Slope and around the world.
The chances are that they will. In June this year Jan Thiissen, a consultant with Arthur D Little, estimated that worldwide investment in GTL could reach $25-30bn by 2015. He put the cost of building plants with a capacity of 100,000 barrels a day at $2-3bn and predicted that they would use the latest technology to convert natural gas into naphtha, diesel, and other valuable products.
Its nice to know that there is still plenty of energy in the world, that oil companies have the ways and means of exploiting it, and that the GTL process can produce super clean diesel.