New JV markets one-stop GTL package

Dec. 18, 2000
Sasol Ltd. has joined with Chevron Corp. to position its low-temperature Sasol Slurry Phase Distillate (SPD) process as the technology of choice for monetizing natural gas reserves and satisfying cleaner fuel demands.

Sasol Ltd. has joined with Chevron Corp. to position its low-temperature Sasol Slurry Phase Distillate (SPD) process as the technology of choice for monetizing natural gas reserves and satisfying cleaner fuel demands.

Speaking in November to attendees at its Slurry Phase Distillate Process Technology Seminar in Sun City, South Africa, the new firm, Sasol Chevron Ltd., based in London, said it has reduced capital costs to build a GTL plant by more than 20% since 1995.

Potential licensors can now purchase a bundled GTL product from Sasol Chevron Ltd. The bundle consists of an autothermal reforming process provided by Haldor Topsoe AS, Lyngby, Denmark, for syngas production, Sasol's SPD process for Fischer Tropsch, and Chevron's Isocracking or Isodewaxing processes for fuels or lube base oil production.

Although Sasol does not use natural gas to make its GTL products today, Mossgas (Pty.) Ltd., Mossel Bay, South Africa, employs Sasol's high-temperature Sasol Synthol process to convert syngas made from natural gas into liquid fuels and petrochemical products.

Sasol Chevron will be using natural gas as feed in future projects, however. To sustain its Sasolburg and Secunda plant operations and expand its feed flexibility, the South African firm plans to build new reformers in Sasolburg to process natural gas from its Pande and Temane gas fields in Mozambique.

Moreover, Sasol's SPD technology will be used at projects in Qatar and Nigeria, which will provide GTL plants with natural gas feed-Qatar from wet gas reserves and Nigeria from gas flaring associated with oil operations.

Alliance

The Sasol Chevron JV, announced in June 1999, became official in October 2000. It is the exclusive vehicle for application of Sasol's SPD GTL technology. Through this JV, the two companies will seek third-party and parent gas reserves worldwide, operate GTL plants, and market GTL products. The JV will also license the technology to third parties.

The company said Sasol brings to the JV its proven GTL SPD technology, 50 years of Fischer Tropsch operating experience, and an understanding of GTL product applications. Chevron contributes its international reputation, its international negotiation experience, its marketing expertise, and its knowledge of exploration and production.

The JV initially plans to focus on GTL opportunities in West Africa, East Africa, the Middle East, Australasia, and the Caribbean. Secondly, it plans to study opportunities in Alaska, South America, and the Caspian Sea.

The JV aims to become recognized as the world leader of GTL. "Anywhere that there's a gas solution to be done, it should be done by the global JV," said George Couvaras, chief executive officer of the new JV.

At the conference, Couvaras announced his company's strategy, defined in two phases: first to establish a position of credibility and, secondly, to consolidate its position.

In the first phase, the company is keen on establishing the first commercial application of SPD technology outside of South Africa, likely in Nigeria. In parallel, it will refine its technology to drive down capital and operating costs and identify prime sites and value-added opportunities to generate early revenue.

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GTL technologies must achieve a capital cost of less than $20,000/daily bbl, said the JV, to be competitive with new refineries, which cost about $12,000/daily bbl. Fig. 1 maps the cost of current and future GTL plant costs, normalized to a 50,000-b/d plant.

In Phase 2, the JV will roll out technology improvements and invest in high-return projects. It will also sell its bundled GTL licensing package by focusing marketing activities on the previously identified worldwide locations.

The market most important to GTL, said Mark Koelmel, chief operating officer of Sasol Chevron, is the market currently served by diesel. Cleaner international fuel regulations and the growing worldwide trend for dieselization of the transport industry make the diesel market important to GTL.

By 2010, the amount of GTL fuel on the market from Sasol Chevron ventures will exceed 300,000 b/d, he said. Although that figure indicates significant growth for GTL, it is small compared to an 11 million b/d worldwide conventional diesel market.

Table 1 compares the fuel quality after hydroprocessing via Isocracking with expected European fuel specifications in 2005. The GTL fuel has essentially no sulfur or aromatics and a high cetane number.

Partnerships

Before the Sasol Chevron JV was formed, Sasol formed five partnerships, with carry over to the JV, to develop the future of the SPD process.

Knowing that its strength is its knowledge and application of Fischer Tropsch, Sasol said, it formed two technology partnerships to leverage knowledge and resources of the remaining two processes that flank the Fischer Tropsch process: natural gas reforming and product workup.

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The SPD licensing package comes with Haldor Topsoe's autothermal reforming process and Chevron's hydrocracking process (Fig. 2). Tying its SPD process with these two technologies gives Sasol several advantages, said the company.

It has the ability to optimize and predict the performance of proven processes. This way, Sasol can control the quality of syngas coming into its SPD process as well as the quality of liquid produced via product upgrading, using Sasol's waxy syncrude product as a feed. Integration of the two processes flanking that of Sasol also allows for cost reductions within the entire package.

Table 2 shows the qualities of the Fischer Tropsch product. It is essentially a very clean light crude oil.

Sasol Chevron licensees can choose between two Chevron product upgrading processes-Isocracking, which hydrocracks heavier fractions to make fuel, or Isodewaxing, which converts normal paraffins to isoparaffins to make lubes.

Sasol's third partnership is with Engelhard Corp.'s process catalyst business group. Engelhard provided scale-up expertise, catalyst manufacturing know-how, pilot plant equipment for evaluation of the catalyst, and plant equipment for trial production.

Sasol provided the catalyst formulation, catalyst preparation protocol, and an understanding of the relationship between its catalyst properties and performance.

The two companies have five commercial-size plant trials, the last one completed in early November, to set the design parameters of the catalyst manufacturing plant.

The plant, to be operational in the second half of 2001, will produce catalysts for the Nigeria and Qatar GTL projects. The catalyst production facility is in De Meern, The Netherlands, its investment cost shared equally between the two partners.

The company also formed partnerships with two engineering firms, Foster Wheeler Energy Ltd., Reading, UK, and Washington Group (formerly Badger Co.), Cambridge, Mass.

Washington's strength, said Sasol, is to develop concepts in the scale up of equipment for technology commercialization. In this capacity, it has collaborated with Sasol since 1974, when it began working on scaling up Sasol's Synthol circulating fluid-bed Fischer Tropsch reactors at Secunda.

Washington helped Sasol convert the Sasol Advanced Synthol (SAS) reactor at Sasolburg to a 2,500 b/d SPD reactor in 1993. Today, it works with the original 100 b/d demonstration-plant version of SPD to develop and optimize SPD's second-generation design, which is comparable in size and weight to Secunda's third generation SAS reactors.

Foster Wheeler helped Sasol with SPD technology development and project development. Its tasks included process development, utility optimization, generic integration, prefeasibility and feasibility studies, and site-specific integration.

Foster Wheeler will develop the design packages on which the first projects' front-end engineering design will be based.

Development of SPD

Sasol has used the Fischer Tropsch process since 1950 to make fuels. The Sasol SPD is its latest generation high-temperature Fischer Tropsch design. It uses slurry-bed reactors and cobalt catalysts to convert syngas into high quality naphtha and diesel.

Sasol said SPD is a vast improvement over the low temperature fixed-bed, tubular reactor, Arge design, used at Sasolburg since 1950. The SPD process has several advantages over the Arge process: isothermal operation, better heat transfer, higher efficiency, lower maintenance, and the ability to add catalyst during operations.

In 1993, Sasol converted a 5-m diameter reactor in Sasolburg, previously used as a first-generation design of the company's high temperature SAS process, to a first generation design of SPD.

Today, with the help of engineering firm Washington, Sasol is optimizing its design for a second-generation, 15,000-b/d reactor and developing a third-generation design. These designs will be incorporated in the Qatar's 33,000 b/d and Nigeria's 33,000-b/d GTL projects, expected to be operational in 2005.

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As shown in Fig. 3, Sasol has improved its reactor sizes to achieve economies of scale over time. The next incremental scale up for the SPD reactor will likely be 20,000 b/d/train. The ability to do this will depend on the ability of air-separation suppliers to support this capacity, the availability of natural gas, and the ease of construction on the chosen site, said the company.

Besides reactor configuration, the catalyst is an important component of the SPD process. In trial runs, the cobalt catalyst has proven to be active, selective, and mechanically strong.

After a 1-year test in a demonstration reactor, Sasol saw no indication of mechanical breakup. The company expects a 3-year life on these catalysts.

Costs

Possibly the most impressive technology revelation during the conference was Sasol's ability to reduce GTL total plant costs, quoted by Foster Wheeler. Total plant costs include front-end engineering design, EPC, licensing and royalty fees, catalyst and chemical costs, owner costs, owner project costs, start-up and commissioning costs, and a contingency.

In 1995, Sasol could create a 30,000-b/d plant on a Gulf Coast-type site with a 45-50% thermal efficiency for $25,000-30,000/daily bbl.

It then estimated a plant construction and start-up schedule of 36-42 months.

In 2000, Sasol Chevron claims it can build that same plant with a better thermal efficiency (60-65%) for less than $25,000/daily bbl. Plant schedule today has also improved significantly, the company said.

Although the JV warned that these numbers are sensitive to plant locations-among other things-the comparison of the cost reduction between 1995 and 2000 is significant.

With these capital and operating costs and attractive gas feedstock prices, Sasol Chevron claims that GTL facilities using its package will be economical at future oil prices below $20/bbl.

Challenges

The Sasol Chevron global joint venture's ultimate goal is to reduce capital and operating costs for its technology package.

Quantitatively, the JV is focused on reducing the total inclusive capital cost for a 15,000 b/d GTL plant (based on the Gulf Coast) to less than $20,000/daily bbl and reducing operating costs (excluding gas feed costs) by a further 20-30% within the next 5 years.

The challenges to meet this goal include:

  • Increasing thermal efficiencies. Thermal efficiency for a well-balanced plant is 60%. Accor d ing to Sasol, there remains room to improve this while maintaining a balance between increased efficiency and reduced costs.
  • Reducing the cost of air separation and syngas production. Syngas production (including air separation) accounts for at least 30% of capital costs and is a major consumer of energy. Fig. 4 breaks down cost components of GTL capital expenditures.
    Fig. 5 shows the changes in performance should new technologies come about for syngas production. Although autothermal reforming is the preferred option today, the successful application of gas heated reforming could extend the performance of syngas production.
    The success of ceramic membrane reforming, which exchanges oxygen across a membrane to convert methane, steam, and air into carbon monoxide, carbon dioxide, and hydrogen, however, will revolutionize syngas-production technology.
  • Improving catalyst performance. Work is well underway to improve all three types of catalyst involved in the GTL step: reforming, Fischer Tropsch, and hydroprocessing catalysts.
    A next generation cobalt catalyst will have improved activity, heavier selectivity, and lower susceptibility to sulfur poisoning. Goals for its hydroprocessing catalyst are operations under milder conditions, increased fuel yield, and product flexibility.
  • Further optimizing the integration between units. By defining the three processes that make up the GTL package, Sasol Chevron said it has taken the first step to optimizing the GTL process. Further improvement is possible, however, as each process owner improves its catalyst and energy efficiency.

Other opportunities

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Although the Sasol Chevron JV focuses on liquid fuels formed by GTL processes with a certain economies of scale, there are other opportunities that arise from the GTL package that could be considered, said the company.

First, although natural gas is considered the primary feedstock for GTL, other feedstocks can be converted to syngas for the Fischer Tropsch process.

For one, Sasol is familiar with coal gasification. Refinery byproducts or waste products, such as petroleum coke, refinery resids, off gases, or biomass, may be processed via gasification to produce syngas.

GTL byproducts can be valuable. The reforming and Fischer Tropsch reactions are both exothermic and thus the heat released from these processes can be captured for heat or power for export.

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Water, the largest byproduct produced in GTL, can be managed and sold.

Although floating GTL plants are technically feasible, they are not yet economic. Floating plants cost 20-40% more than land-based ones. Space and weight limitations are also disadvantages.

On floating GTLs, the syncrude product is mixed with crude oil from the well and is therefore a lower-value product than its counterparts.

Finally, the two-train, 30,000-b/d economies of scale thus far attained by Sasol Chevron require fields greater than 3 tcf in size for a life cycle of 30 years.

Although smaller-scale GTL plants do not make sense at the moment, technology advances will make them more viable in the future.