Gas-to-Liquids Technology Makes Fuel, Oil From Natural Gas

September 2014, - Feature

by Deborah Lockridge, Editor-in-Chief - Also by this author

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Shell’s gas-to-liquids plant in Qatar is the largest in the world. Photo: Shell
Shell’s gas-to-liquids plant in Qatar is the largest in the world. Photo: Shell
At a giant facility in Qatar, Shell is turning natural gas into products normally produced from crude oil — fuel, base oils, paraffin, kerosene, etc.

Shell started looking for a way to convert natural gas into liquid hydrocarbons back during the Middle East oil crisis of the 1970s. While it found a way to do it in the lab, the researchers could only make a few drops a day. It took 10 years to get to where they could produce a larger sample — a whopping three barrels per day.

It took another 10 years to start producing commercially at a plant in Malaysia in 1993, which today can produce 14,700 barrels a day.

In 2012, Shell’s Pearl GTL plant started production in Qatar. The size of 453 soccer fields and made with enough steel to build 10 Eiffel towers, the Qatar plant can produce 140,000 barrels a day. The complex process is covered by 3,500 patents.

“Shell produces a lot more natural gas than oil these days, and we need to find ways of making that useful for transportation industries,” explains Richard Tucker, general manager of commercial and industry fuels and lubricants technology for Shell.

In a couple of global markets, where fuel quality is a problem, Shell is putting the GTL “gasoil” fuel into the market as a pure diesel fuel. “It’s cleaner burning and helps to reduce emissions, and has a very high cetane number, around 80.

“It also can help reduce engine noise,” Tucker notes.

GTL diesel fuel also can be used to blend with petroleum-based diesel to improve it.

Probably the first place GTL will get widespread use in the U.S. won’t actually be in fuels, but in engine oils, as Shell likely will use the purer base stock to help it create lower-viscosity engine oils to improve fuel economy and meet the upcoming new engine oil classification standards. GTL-based lubricants already are being used in light vehicles.

In fact, Shell just launched Pennzoil products containing GTL in the U.S., a top-tier product called Pennzoil Ultra, for autos, according to Selda Gunsel, Shell vice president of technology.

“We have current research and development projects we are focusing on for heavy-duty using GTL,” she says. “We’ve developed prototypes and are doing field trials. It will be applied to heavy-duty engine oil, transmission fluids, grease, because the base oils make them suitable for formulating high-performance lubricants for virtually any application.”

The U.S. Energy Department says there are currently five GTL plants operating globally, with capacities ranging from 2,700 barrels per day to Shell’s 140,000. None are currently in the U.S. Several have been proposed, but late last year, according to DOE, Shell cancelled plans to build a large-scale GTL facility in Louisiana because of high estimated capital costs and market uncertainty regarding natural gas and petroleum product prices. n


  1. 1. Greg Foreman [ September 17, 2014 @ 09:06AM ]

    The third factoid of information concerning GTL expansion in the U.S. concerns a company out of West Sacramento, California named GREYROCK ENERGY. GREYROCK markets and installs a modular GTL refinery capable of producing 1,000 barrels(42,000 gallons) of diesel daily. The upside to investment in such a system is
    lower cost(when compared with projects the magnitude of SASOL's) for market entry, allowing creation of a revenue stream that could be utilized for future expansion of the original system. GREYROCK's modular system allows for localized production and distribution of diesel direct from the producing field, negating the necessity for transmission systems(pipelines) to distant refiners. The system allows GTL processing to be done at the production field level eliminating the necessity for tying into or construction of pipelines to “ferry” production to an established refinery. The end product, diesel, could be transported via truck to a distributor.

  2. 2. Greg Foreman [ September 17, 2014 @ 09:09AM ]

    Thank you for offering exposure to the GTL, Gas-to-Liquid, product. I have followed the processes expansion and benefits for a number of years and wanted to contribute a few additional “factoids” concerning GTL.
    First, the U.S. will have an operational GTL refinery on line, producing diesel from natural gas sometime in 2018. SASOL is currently building a $11-$14 billion dollar GTL refinery in West Lake, LA. Once operational the plant will have a daily capacity of 92K barrels(4,032,000 gallons) of “diesel” fuel.
    Second, Shell's decision to “shelve” the proposed GTL plant in Norco, LA, (based on a MOTLEY FOOL article written by Arjun Sreekumar) was due as much in part to investor concerns over Shell's capital expenditures as much as, or possibility more so, than the incremental cost of the plants construction. Major Shell investors felt the company was “top heavy”, over extended, in capital projects requiring lengthy, lower rate of returns than in operational projects, such as exploration, which historically produce returns rates more concrete, more definitive and on a shorter term when compared projects such projects as refineries. “Investors have put renewed pressure on the company to reduce capital spending, which is expected to come in at a record $45 billion this year, roughly $5 billion higher than the company's previous guidance. With total capital spending for 2012 and 2013 expected to reach $75 billion, the company will likely have to resort to asset sales of roughly $15 billion if it is to meet its target of $130 billion in spending over the 2012-2015 period .”(REF: MOTLEY FOOL, WHY SHELL SCRAPPED ITS U.S. GAS-TO-LIQUID PLANT, ARJUN SREEKUM) My understanding(granted totally subjective on my part)is Shell has not “written off” the GTL market in the U.S. The possibility of a large scale GTL refinery remains an investment opportunity for future examination.


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