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Monetizing Natural Gas

Through GTL Technology


-A Techno Economic Analysis

Subhasish Mitra
M.Tech Scholar
Department of Chemical Engg
IIT 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 Synthesis gas
-Main Process Sections: [1]
reactor

Air Compr Furnace

FT
reactor

GTG

Separator section
Process Flow Diagram
Integration loop-2
-Energy Integration Sections: [1]

Integration
Integration loop-4 loop -1

Integration loop-3
Process Simulation Flow sheet – Overall
Plant:

Heat integration
primary loop

Heat
integrati
on
seconda
ry 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
Assume feedstock flow rate with std.
compositions and suitable ratios to
Most of the input data e.g. raw materials
other reactants. Use std. reactions for
flow rates, compositions are not available
in the document being a patent. the process available in literature.
Match given operating conditions by
repeated trial & error.
Only one recycle stream to be handled
Energy integration is difficult because of at a time. After convergence is
multiple interacting process streams. 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 $21.62/bbl & $10/bbl**


integration considering NG@$0.5/MMBTU)

**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 $32941/bbl product


total investment cost)
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 Crude - Diesel price


$2.8/gal = $117.6/bbl $3.2/gal = $134.4/bbl

GTL - Gasoline price [7] GTL - Diesel price [7]

$1.16/gal = $48.72/bbl $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 Natural gas
cost:$0.5/MMBTU
25.00

NG price Natural gas


price:$1.0/MMBTU
20.00
increases
15.00 Natural gas price :
$1.5/MMBTU

10.00
Natural gas
price:$1.5/MMBTU
% ROI

5.00

Natural gas
0.00 cost:$2.0/MMBTU
0 2 4 6 8 10 12

-5.00 Natural gas


cost:$2.5/MMBTU

-10.00
Natural gas
cost:$3.0/MMBTU
-15.00
Years Natural gas
cost:$3.5/MMBTU
Payback Period Without Heat Integration:
Impact of Natural Gas price on GTL project payback time
25.00

Project not
profitable when NG
20.00
price exceeds
GTL project pay back time (years)

$2.5/MMBTU
15.00

10.00

5.00

0.00
0 0.5 1 1.5 2 2.5 3 3.5 4

Natural gas price ($/MMBTU)


ROI With Heat Integration:
Natural gas
Impact of Natural Gas cost on profitability of GTL project cost:$0.5/MMBTU

40.00
Natural gas
NG price price:$1.0/MMBTU

35.00
increases Natural gas price :
$1.5/MMBTU
30.00
Natural gas
price:$1.5/MMBTU
25.00
Natural gas
20.00 cost:$2.0/MMBTU
% R OI

Natural gas
15.00
cost:$2.5/MMBTU

10.00 Natural gas


cost:$3.0/MMBTU
5.00
Natural gas
cost:$3.5/MMBTU
0.00
0 2 4 6 8 10 12 Natural gas
-5.00 cost:$4.0/MMBTU

Natural gas
-10.00 cost:$4.5/MMBTU
Years
Natural gas
cost:$5.0/MMBTU
Payback Period With Heat Integration:

Impact of Natural Gas price on GTL project payback time

10.00

9.00 Project not


profitable when NG
GTL projec t pay back tim e (years)

8.00
price exceeds
7.00 $3.0/MMBTU
6.00

5.00

4.00

3.00

2.00

1.00

0.00
0 1 2 3 4 5 6

Natural gas price ($/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!

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