By OGJ editors
HOUSTON, Jan. 2 -- BP Exploration (Alaska) Inc. and its technology partner, London-based Davy Process Technology Ltd. say they have proven the new gas-to-liquids technologies being tested at BP's $86 million demonstration plant at Nikiski on the Kenai Peninsula south of Anchorage (OGJ Online, Aug. 16, 2003). The plant began operations July 27.
According to a Dec. 26 report in Alaska Oil & Gas Reporter, Anchorage, former BP engineering team leader Steve Fortune told the Alaska Support Industry Alliance Dec. 11 that operations by the joint venture have determined that the technology works, "although we intend to complete the test program," Fortune added.
The goal of the demonstration plant was to test two propriety technologies: a compact reformer and a converter catalyst. BP has said its GTL technology—used to convert methane gas into synthetic crude oil (syncrude) at the Nikiski site—could play an important role in commercializing stranded natural gas resources worldwide, especially where reserves were too small to economically employ LNG technology.
BP's compact reformer technology is used in the first of three stages—the manufacturing of synthesis gas (syngas) whereby methane is broken down into hydrogen and carbon monoxide when mixed with heat and steam.
In the second stage, a waxy hydrocarbon product is produced from the syngas, and in the third stage, a variety of clean-fuel products can be made from the paraffins—including high-quality syncrude—using standard hydrocracking.
The compact reformer could be a big technology breakthrough for the emerging GTL industry because it could radically shrink the size and expense of the reformers needed for GTL plants, Fortune told the Alliance. The compact reformer typically is 60-70% of the total cost of a plant, he said in the article.
He also said there were certain elements of the demonstration plant that could be eliminated successfully in a commercial plant, thus resulting in "significant" savings. BP's technology also takes oxygen from air, eliminating the need for the oxygen plant that some other GTL technologies require.
The new compact reformer BP developed for the Nikiski plant is commercial scale and designed to produce enough syngas to develop 300 b/d of syncrude or more, a BP representative said. Several units of that size could be used for a larger plant.
The Nikiski plant has produced 4,100 bbl of syncrude to date, which is trucked to a nearby Tesoro Alaska Petroleum Co. refinery, which blends it with crude oil to use in its refinery, the Alaska Oil & Gas Reporter quoted Fortune as saying.
GTL vs. LNG
Although BP's compact reformer breakthrough may lower the cost of GTL plants, Fortune said, it is still not enough to compete successfully with LNG or conventional crude oil refineries.
To compete effectively with LNG, for example, costs would have drop to about $17,000/b/d of product from $20,000/daily bbl of product. To compete with crude oil refined now to make fuels, costs would have to shrink to $11,000-12,000/ daily bbl of product.
And compared with LNG, the GTL process currently is not thermally efficient—efficient in converting the carbon in natural gas into the end product—although progress is being made in making GTL more efficient, BP said.
Nor does the company currently foresee GTL as an option for Alaska's North Slope gas. BP stressed that a long-distance pipeline would hold more promise for such large reserves.
However, BP's technology would fit well with many stranded gas applications, especially in locals such as Bolivia and Colombia where gas reserves exist in small pockets, whereas LNG projects must be large-scale to be viable and typically require gas deposits of 2-5 tcf, BP said.
BP, through its partner Davy Process Technology, currently is negotiating with potential licensees for the technology, the report added.
