Houston, Texas (PRWEB) May 19, 2014
Some 13 U.S. GTL projects announced in the last two years intend to devote most of their output to transport fuels production. They join a growing wave of now 50 gas-conversion projects under consideration, in planning or advanced design, or being commissioned. Given the arbitrage opportunity between natural gas and crude oil-derived products (like gasoline and diesel), many developers see high cost fuels matched with relatively low-cost natural gas as an important opportunity.
“As crude oil cost constitutes most of the retail price of gasoline and diesel, replacing this feedstock with natural gas makes economic sense,” said Chris Cothran, gasification analyst at Zeus Intelligence.
Project proponents tout GTL-derived fuels as clean alternatives to crude oil-derived products, with negligible sulfur content, lower NOX, CO and CO2 emissions. Perhaps more importantly, such products boast “drop-in” capability -- no infrastructure or engine changes are needed to incorporate GTL fuels into the nation’s fuel supply. “Our recent survey found that ~1/3 of proposed gas-conversion projects in the U.S. intend to supply transport fuels as a majority of their project’s product slate,” Cothran said.
“Natural gas has already made inroads towards supplanting conventional transport fuels in the U.S. Heavy-duty vehicle operators see the opportunity to drop their fuel consumption costs by as much as 2/3, simply by investing in the switch to natural gas,” Cothran noted.
Developers face key challenges. According to Cothran, “Technical hurdles to downscaling natural gas to transportation fuel processes may continue to impede adoption in the short-term.” The pricing spread between natural gas and crude oil is another important factor. Some analysts contend this spread will not be sustained and alternative products, such as waxes, may have more immediate opportunities.
Although Sasol’s 96,000-b/d GTL project in Louisiana has received high-profile media coverage, another dozen smaller-scale projects are proposed by developers including Southern California Gas, SGC Energia, Juniper GTL, Coskata, G2X Energy, Novello GTL, Pinto Energy, Nerd Gas Co., Primus Green Energy, Emberclear, Sundrop, Waste Management, Velocys, and NRG Energy. These projects use varied conversion processes -- Fischer-Tropsch GTL, methanol-to-gasoline, syngas-to-gasoline plus (STG+), and others. A complete list of GTL-based transport fuels projects can be downloaded at http://www.gtlnorthamerica.com/forms/survey-gtl-transport-fuel/.
North America's rapidly growing gas-conversion sector will be examined by leading project developers and technologists at the fourth-annual GTL North America conference June 3-5 at Houston's Westin Galleria hotel. The event includes Fluor's opening gas-conversion workshop, a tour of Ventech Engineering's modular fabrication facility, and speakers from leading firms (JM-Davy, Axens, Sasol, ExxonMobil, Praxair, Velocys, Worley Parsons and others). More information is available at http://www.gtlnorthamerica.com.
To stay abreast of global syngas and GTL trends and analysis, Zeus' Syngas Refiner Report offers invaluable market perspective. Subscribers can access the industry-leading Global Gasification Project Databases to track projects worldwide. More information is available at http://www.zeusintel.com/Gasification.aspx.