Underdog Rentech furthers gas-to-liquids plans


Karen Broyles
OGJ Online

In a recent conference call, Denver-based Rentech Inc. discussed its plans to convert the newly acquired Sand Creek plant in Commerce City, Colo., from a methanol plant to a gas-to-liquids plant. Once the conversion is complete, Sand Creek would become the first commercial GTL plant in the US, 3-5 years before any other such plants are likely, the company said.

Rentech�an underdog in the GTL race, which is led by well-known companies such as Sasol Ltd., Royal Dutch/Shell Group, and relative newcomer Syntroleum Corp.�stands to benefit substantially from tightening fuel standards and growing interest in developing clean fuels technologies, the company said. As proof of this trend, it cited renewed interest in GTL technology among ExxonMobil Corp., BP, Conoco Inc., and other energy companies.

In a recently released study, Battele, a technology development and management group, identified GTL conversion as one of the ten most important energy trends of the decade, said Dennis L. Yacobson, president, chairman, and CEO of Rentech. "We believe the level of interest and activity that Rentech is experiencing is emblematic of the inevitability of gas-to-liquids as a key 21st century technology.

"GTL is in a transition period between research, development, and commercialization," said Yacobson. "Numerous energy companies have publicly demonstrated their commitment to the commercialization of GTL either through licensing agreements, technology development contracts, or capital commitments to feasibility studies and pilot plant development."

Rentech subsidiary Rentech Development Corp. and Republic Financial Corp., Aurora, Colo., jointly own Sand Creek Energy LLC, the new owner of the facility. Basic engineering work for GTL conversion has been completed. Once the conversion is complete, the plant should produce 800-1,000 b/d of high-value, clean-burning sulfur and aromatic-free diesel fuel and other products.

In July 1999, Rentech began a feasibility study with FuelCell Energy Inc., Danbury, Conn., on a commercial-scale fuel cell power plant with up to 9,000 kw of generation capacity at the Sand Creek location. That review is still under way. Once the GTL plant is operating, Rentech will submit a modification permit application to state and local authorities; the company expects to receive approval for the project within 2-6 months.

Also in July, Rentech submitted a petition to the US Department of Energy to designate its diesel fuel as an alternative fuel, making it the first GTL technology provider to petition DOE on the subject, it claims. The petition process takes several months, says Rentech.

In September, the DOE will submit a notice of intent for rulemaking for alternative fuel.

But Rentech hopes to sell more than synthetic fuels from the Sand Creek facility. A potential customer for Sand Creek's excess hydrogen is Houston-based Conoco Inc., which owns a refinery in Commerce City near the Sand Creek plant, says Rentech. The sale of hydrogen would add another source of cash flow for Rentech that would alleviate some of the cost of buying natural gas feed.

Rocky Mountain region gas is inexpensive compared to prices in other regions of the US, which also should keep feedstock costs down for Rentech. Bullish prices for gas also make more valuable the hydrogen sold, says the firm.

GTL technology cooperative efforts
Rentech is currently in "various levels of discussions" and negotiations with several companies interested in using its GTL technology, Yacobson noted.

In March, the firm said that Texaco subsidiary Texaco Energy Systems Inc. entered an agreement with it in which Texaco Energy Systems received the right to evaluate and acquire up to half of Rentech's 50% interest in the Sand Creek project. The company also continues its work under a technical services agreement with Texaco to research integrating Rentech's Fischer-Tropsch technology with Texaco's gasification process.

Rentech and Texaco signed their 18-month technical services agreement in June 1999�a follow-up to an earlier licensing agreement signed by the companies in October 1998�calling for technical and developmental work to be carried out at Rentech's research and development facility in Denver. Their efforts have been focused on technology integration and maximizing the hydrocarbon yield from synthesis gas produced via Texaco's gasification process, said Rentech. Revenues to Rentech under the agreement are expected to reach $2 million.

Rentech in August 1999 was named part of a $14.4 million DOE project led by Texaco. The Early Entrance Co-Production Plant project seeks to develop an engineering design for a new type of energy facility.

By combining efforts to develop Texaco's gasification process and Rentech's GTL technology, the companies hope to achieve their goal of converting coal and petroleum coke to energy in the form of electricity and clean GTL fuels.

Rentech and Jacobs Engineering UK, a unit of Pasadena, Calif.-based Jacobs Engineering Group Inc., in February also signed an agreement to market Rentech's synthesis GTL process technology worldwide. And in March, Rentech announced a $252 million feasibility study for a 10,000 b/d GTL plant with Denver-based Forest Oil Corp. in South Africa using Rentech's GTL process.

Yacobson said he expects Rentech's third quarter earnings to be substantially higher than in past years. Because its total revenues exceed internal projections, he said, Rentech will be able to maintain its focus on GTL and try to meet its goal of having one commercial GTL project under way by the end of this year.

Related Articles

Eagle Ford briefs

02/10/2015

Forest Oil to sell Arkoma basin gas properties

11/18/2014 Forest Oil Corp., Denver, has agreed to sell its natural gas properties in the Arkoma basin for aftertax cash proceeds of $185 million. The deal, e...

AMP acquires additional midstream assets in Eagle Ford

09/01/2014 American Midstream Partners LP (AMP) has opted to use, and has received approval of, its right-of-first-offer to acquire the Gonzales County, Tex.,...

Sabine, Forest sign merger agreement

05/06/2014 Sabine Oil & Gas LLC and Forest Oil Corp. have signed a definitive merger agreement under which the companies will combine their businesses in ...

Templar Energy buys Texas Panhandle assets for $1 billion

10/04/2013 Oklahoma City-based independent Templar Energy LLC has acquired oil and gas assets in the Texas Panhandle from Forest Oil Corp. for $1 billion.

Tennessee firm buys Pacific Energy Alaska assets

12/17/2009 A unit of Miller Petroleum Inc., Huntsville, Tenn., has purchased the Alaska Cook Inlet assets of bankrupt Pacific Energy Resources Ltd., Long Beac...

Forest Oil to sell Permian basin assets

12/03/2009 Forest Oil Corp. of Denver agreed to sell its remaining Permian basin properties for $800 million to SandRidge Exploration & Production LLC.

Forest Oil makes executive appointments

11/25/2009

Forest Oil Corp. made several executive personnel changes.

Texas-Panhandle

11/03/2009 Forest Oil Corp., Denver, drilled and completed its second operated horizontal Granite Wash in the Greater Buffalo Wallow area of Hemphill County, ...
White Papers

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts


Prevention, Detection and Mitigation of pipeline leaks in the modern world

When Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST



On Demand

Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected