Monetizing Natural Gas Through GTL_technology_open Ended Project Final

Monetizing Natural Gas Through GTL Technology

-A Techno Economic Analysis

Subhasish MitraM.Tech ScholarDepartment of Chemical EnggIIT Kanpur

Brief Introduction:

Of late, serious need is felt for producing cleaner fuel on sustainable basis.

Natural gas : Natural choice over depleting oil resources being more green however most of the natural gas reserves are economically stranded.

GTL technology: Conversion of natural gas to longer chain hydrocarbons through FT synthesis that typically remain in the range of middle distillate i.e. transportation fuel.

Process Flow Diagram -Main Process Sections: [1]

GTG

Separator section

Furnace

Synthesis gas reactor

Air Compr

FT reactor

Process Flow Diagram -Energy Integration Sections: [1]

Integration loop-2

Integration loop -1

Integration loop-3

Integration loop-4

Process Simulation Flow sheet – Overall Plant:

Heat integration primary loop

Heat integration secondary loop

Simulation Summary:

Natural Gas Feed Rate : 100 MMSCFD (4891 kmol/hr)

Steam requirement : 10369 kmol/hr

Air requirement : 4158 kmol/hr

Product rate : 9845 bbl/day

Water generated : 10190 kmol/hr

Product comprises of Diesel, Naphtha & Wax.

Wax undergoes hydro-cracking (not simulated) and over all yield is diesel : 70%, Naphtha : 30%. (Typical FT product composition)

Energy Integration Summary:

Heat extracted from GT exhaust, ATR and FTR product stream utilized through heat integrated system to generate steam and power.

Steam generated 10910 kmol/hr

Power produced 113.5 MW

Tail gas produced 10592 kmol/hr

Tail gas consumed 6071 kmol/hr

Tail gas recovery : 57.4%

Balance tail gas can be sold out to any adjacent facility.

Simulation - Problems & Solutions:

Problems Solutions

Most of the input data e.g. raw materials flow rates, compositions are not available in the document being a patent.

Assume feedstock flow rate with std. compositions and suitable ratios to other reactants. Use std. reactions for the process available in literature. Match given operating conditions by repeated trial & error.

Energy integration is difficult because of multiple interacting process streams.

Only one recycle stream to be handled at a time. After convergence is achieved, next recycle loop can be focused on.

Summary:

A conceptual GTL plant simulation study is carried out based on the flow scheme obtained from Ref 1.

The simulation is done for 100 mmscfd natural gas feed rate which produces 9845 bbl/day syn-fuel.

Heat integration results into 113.5 MW power generation along with complete steam requirement for the process.

~57% tail gas utilized as fuel gas in the process itself. Balance gas can be sold out to any adjacent facility.

Water generated by the process can be used for cooling water make up in the process itself.

GTL Technology

Economic Analysis

GTL Economy Parameters: [9]

Historical Oil Price Trend in International Market:

Operating Cost of a GTL Plant: [6,7,8,12]

Natural Gas $0.5 – $5 /MMBTU

Steam $20.7/ton

Electricity $0.09/kwh

Cooling water $0.021/ton

Water treatment $0.2/ton

Transportation cost $0.5/bbl of product

Other unaccounted cost 15% of total operating cost

Operating Cost (before & after heat integration considering NG@$0.5/MMBTU)

$21.62/bbl & $10/bbl**

**Excludes steam & electricity cost

Economic Data of a GTL Plant: [6,7,8]

Plant fixed cost $28000/bbl product

Total investment cost (fixed cost 85% of total investment cost)

$32941/bbl product

Total Investment cost $ 324 million (Debt : 70%, Equity : 30%)

Plant life 25 years

Depreciation (Straight line) $12.97 million/yr

Tax deduction & Dividend Payout 30% & 10%

Latest Gasoline &Diesel Price in International Market:

Crude - Gasoline price

$2.8/gal = $117.6/bbl

Crude - Diesel price

$3.2/gal = $134.4/bbl

GTL - Gasoline price [7]

$1.16/gal = $48.72/bbl

GTL - Diesel price [7]

$2.1/gal = $88.2/bbl

Latest Gas Price in International Market:

When NG price is @$4/MMBTU

GTL plant operating cost:

$65.61/bbl product (W/O heat integration)

$53.82/bbl product (With heat integration)

What does these numbers say?

When crude oil price lies below $50/bbl, GTL Technology is not competitive to implement.

Since at present oil price> $80/bbl, it’s right time to invest in a GTL plant in a location where NG is available < $4/MMBTU.

ROI Without Heat Integration:

Impact of Natural Gas cost on profitability of GTL project

-15.00

-10.00

-5.00

0.00

5.00

10.00

15.00

20.00

25.00

0 2 4 6 8 10 12

Years

% R

OI

Natural gascost:$0.5/MMBTU

Natural gasprice:$1.0/MMBTU

Natural gas price :$1.5/MMBTU






NG price increases

Payback Period Without Heat Integration:

Impact of Natural Gas price on GTL project payback time

0.00

5.00

10.00

15.00

20.00

25.00

0 0.5 1 1.5 2 2.5 3 3.5 4

Natural gas price ($/MMBTU)

GT

L p

roje

ct

pa

y b

ac

k t

ime

(y

ea

rs)

Project not profitable when NG price exceeds $2.5/MMBTU

ROI With Heat Integration:

Impact of Natural Gas cost on profitability of GTL project

-10.00

-5.00

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

0 2 4 6 8 10 12

Years

% R

OI



Natural gas price :$1.5/MMBTU









NG price increases

Payback Period With Heat Integration:

Impact of Natural Gas price on GTL project payback time

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

0 1 2 3 4 5 6

Natural gas price ($/MMBTU)

GT

L p

roje

ct

pa

y b

ac

k t

ime

(y

ea

rs)

Project not profitable when NG price exceeds $3.0/MMBTU

Where GTL Plant installation is feasible:

Existing GTL Technology:

Capacity Enhancement of GTL Technology:

Why Capacity Enhancement?

•More concern over producing cleaner fuel

•Rising oil price

•Advantage of Learning Curve over the technology

•Profit from a GTL plant appreciates as capacity increases.

Conclusion:

Crude oil and natural gas prices are the key drivers behind GTL project. The project becomes feasible when oil price is high (>$50/bbl) and NG is available at cheaper rate (<=$3/MMBTU) with large NG reserve.

Heat integration considerably reduces operating cost by generating onsite steam and power hence technical challenge lies in implementing efficient heat integration system.50% of simulated power considered to be practically possible of which 50% is sold out. Credit for tail gas selling revenue not considered.

GTL technology is capital intensive however learning curve is expected to bring down the cost and help in capacity enhancement.

List of References:

1. US patent US6,172,124B1, Wolflick et al, Jan 9, 2001.

2. Working Document of the NPC Global Oil and Gas Study, NPC, Andrew J. Slaughter

Shell Exploration & Production Company.

3. Catalytic autothermal reforming of methane and propane over supported metal catalysts

S. Ayabe, H. Omoto, T. Utaka, R. Kikuchi, K. Sasaki, Y. Teraoka, K. Eguchi, Applied Catalysis A: General 241 (2003) 261–269.

4. Simulation Analysis of a Gas-to-Liquid Process Using Aspen Plus, Xu Hao, Martina Elissa Djatmiko, Yuanyuan Xu, Yining Wang, Jie Chang, Yongwang Li, Chem. Eng. Technol. 2008, 31, No. 2, 188–196.

5. Simulation of partial oxidation of natural gas to synthesis gas using ASPEN PLUS, M. Khoshnoodi, Y.S. Lim, Fuel Processing Technology 50 (1997) 275-289.

6. Options for Gas-To-Liquids Technology in ALASKA, Idaho National Engineering and Environmental Laboratory, E. P. Robertson, INEEL/EXT-99-01023, December 1999.

7. Simulation, integration, and economic analysis of gas-to-liquid processes

Buping Bao, Mahmoud M. El-Halwagi, Nimir O. Elbashir, Fuel Processing Technology (Review papers).

8. The potential of gas-to-liquid technology in the energy market, The case of Qatar, R. Chedida, M. Kobrosly, R. Ghajar, Energy Policy 35 (2007) 4799–4811.

List of References:

9. GTL: Economics, Challenges and Value Proposition, Rajnish Goswami

Vice President - Gas and Power, Wood Mackenzie.

10. FISCHER TROPSCH: A FUTURISTIC VIEW, Anton. C. Vosloo, Sasol Technology Research and Development, SASOLBURG, 9570, Republic of South Africa.

11. Oil & Gas Journal, International Petroleum News & Technology, PennWell, Mar 14, 2005.

12. Energy Tips, US Dept of Energy, Energy Efficiency & Renewable Energy, Steam Tips # Sheet 15, January 2006.

Thanks for

your attention!

Monetizing Natural Gas Through GTL_technology_open Ended Project Final

Documents

fuel gas

integration loop

balance gas

conversion of natural

natural gas reserves

balance tail gas

mmscfd natural gas feed

process available