Gas to Liquids: Trends

GlobalData Thematic Research 4 December 2020 (Last Updated December 4th, 2020 10:12)

Gas-to-liquids (GTL) process has evolved over the years and provides an alternative way of utilising natural gas resources for consumption.

Gas to Liquids: Trends
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Gas-to-liquids (GTL) process has evolved over the years and provides an alternative way of utilising natural gas resources for consumption. Various high value products can be obtained from this conversion, including gasoline, diesel, naphtha, and waxes.

Trends

Listed below are the key trends in oil and gas industry that are likely to influence gas to liquids process adoption, as identified by GlobalData.

Need for GTL

GTL process provides a means to monetise gas reserves that would otherwise remain stranded due to their low volumes. The challenge in monetising these gas discoveries increase when the deposits are located in regions with no supporting pipeline infrastructure in the vicinity. The low volumes make it uneconomical to construct new pipelines to transport this gas.

Moreover, the absence of any nearby industrial facility, such as a power plant, also makes it unviable to consider producing the new gas discovery, thereby leaving it stranded. GTL can convert this stranded natural gas into fuels and other marketable products. These products are relatively easier to transport and offer higher monetary value over natural gas.

Eco-friendly fuel

GTL products use natural gas as feedstock, which is a low carbon energy source. Hence, the fuels produced from GTL are also relatively low on emissions than crude oil-based fuels. The GTL fuels have a higher hydrogen-to-carbon (H/C) ratio. These products are also low on impurities of sulfur compounds, as compared to the conventional fuels generated from crude oil. This translates to better environmental performance of GTL fuels.

Monetising flared gas

GTL process is a good solution to capture and utilise gas that is flared from industrial facilities. Instead of flaring the associated gas, it can be converted to liquid fuel, using small-scale GTL units. A number of oil producing countries have enacted various regulations and targets for gas flaring practices within their jurisdiction.

Such regulations could incentivise oil companies to adopt GTL processes in their operational portfolios.

Technology development

Gas to liquid conversion process has undergone lot of change since its inception in 1920s. In the last few decades, Shell, Sasol, and ExxonMobil, have worked to improve the technology for large scale implementation. Sasol has developed numerous proprietary GTL processes based on the Fischer–Tropsch (FT) process, which can be used for large scale deployment. Sasol’s GTL process has been employed in plants in South Africa, Nigeria, and Qatar.

Small-scale modular plants

Small-scale GTL plants have capacities ranging from 1,000bpd to 15,000bpd. These are especially useful when the feedstock is limited or sparse. A small-scale modular plant needs a concise design that can be replicated numerous times and deployed in varying geographical reliefs. A number of research papers have highlighted the scope for profitability for small scale GTL plants.

Companies, such as Primus Green Energy, Gas Technologies, and INFRA Technologies have developed modular solutions that can operate on a small scale. These companies have also developed proprietary GTL technologies suited for modular plant implementation.

Blending

GTL products can be blended with other traditional transportation fuels to improve their performance. Diesel produced from crude oil, when blended with GTL-based diesel, has shown to improve the brake specific fuel consumption (BSFC) in diesel engines. Similarly, GTL-based ethanol, when blended with gasoline reduces engine knocking. GTL-based naphtha can also be used in oxygenated gasoline fuel blends.

Producing premium lubricants from GTL

GTL conversion produces high quality base oils called ISO paraffin. These can be used to prepare premium lubricants that are in high demand in the automobile industry. These lubricants provide better viscosity properties and superior oxidation stability. They have longer shelf life; offer better resistance against equipment tear; improve fuel consumption; and provide better overall equipment cleanliness. Shell markets its GTL-based base oil products under the Shell Risella X brand.

Financial viability of GTL projects

Capital expenditure required for constructing large-scale GTL plants are generally high when compared to conventional refineries. High capital cost has been a major deterrent for the development of larger GTL plants worldwide. Even the prevailing industry downturn from Covid-19 may lead to some project delays and cancellations.

A GTL project can be competitive to a refinery only when crude oil prices are considerably high. However, small-scale units are relatively less susceptible to oil price volatility due to their compact and modular designs.

This is an edited extract from the Gas to Liquids (Oil and Gas) – Thematic Research report produced by GlobalData Thematic Research.