gtl-pros,cons and developments

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Syngas Chemistry: Key Technology for the 21 st Century Dr. Theo H Fleisch Distinguished Advisor, BP America Houston, TX 77079 Syngas Chemistry Symposium Dresden, Germany October 4 – 6, 2006

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Page 1: Gtl-pros,Cons and Developments

Syngas Chemistry: Key Technology for the 21st Century

Dr. Theo H FleischDistinguished Advisor, BP AmericaHouston, TX 77079

Syngas Chemistry SymposiumDresden, GermanyOctober 4 – 6, 2006

Page 2: Gtl-pros,Cons and Developments

Outline

• Syngas: Business case

• Gas To Products (GTP) and XTP

− Products and markets

− Pro’s and con’s

− Technologies

− Global projects

− Economic viability

• The future of XTP

Page 3: Gtl-pros,Cons and Developments

World energy sources

Oil

Coal

Gas

Hydro

Nuclear

Share of world primary energy consumption by fuel (1965 – 2004)

0%

10%

20%

30%

40%

50%

1965 1970 1975 1980 1985 1990 1995 2000

Page 4: Gtl-pros,Cons and Developments

Gas resources: plentiful but…

• Gas Reserves (2004) = 6300TCF (180TCM)

• About 40% of gas (2500TCF) is stranded (Russia—Iran—Qatar)• R/P ratio: ~70 (versus oil at ~35)

• Transportability and market issues

Page 5: Gtl-pros,Cons and Developments

Distribution of energy consumption and flaring (15 bcfd?)

Page 6: Gtl-pros,Cons and Developments

Remote and flared gas: an inexpensive feedstock

GTP Value creation:

Feedstock: $0 to 1.50/MMBTU (USA: ~$6/MMBTU)

Products: $10/MMBTU

(diesel at $50 oil or methanol at $200/t)

Results: Greater netback to the feedstock

AND: New markets for gas

Page 7: Gtl-pros,Cons and Developments

Role of GTP in E&P

PowerGeneration

Supply Markets

Pipelines

LNG

GTP

Others?

1. Moving Gas to Markets

2. Creation of New Gas Markets Diesel, gasoline

Chemicals, plastics

Cooking, power

3. Gas AccessNew gas markets can give access to stranded gas resources

New exploration opportunities for “remote” gas

Page 8: Gtl-pros,Cons and Developments

New drivers: coal and biomass

• Abundance (R/P ratio for coal is >200 years)

• Renewable fuel

• Energy security!!

• Concerns:

−Cost (much higher than for gas)

−CO2 make with coal

Page 9: Gtl-pros,Cons and Developments

Global energy supply & demand

Source: World Energy Outlook 2004

Power Generation

Transportation

37Mboe/d

76Mboe/d

Buildings

56Mboe/d

Industry

45Mboe/d

14

Nuclear

14Mboe/d

5Renewables

5Mboe/d

2

17

3

1

Biomass

23Mboe/d

33

8

2

Coal

43Mboe/d

11

1016

1

Gas

38Mboe/d

6

35

12

10

Oil

63Mboe/d

Page 10: Gtl-pros,Cons and Developments

Outline

• Syngas: Business case

• The case for Gas To Products (GTP) and XTP

− Products and markets

− Pro’s and con’s

− Technologies

− Global projects

− Economic viability

• The future of XTP

Page 11: Gtl-pros,Cons and Developments

GTP: Inclusive term for all chemical gas conversion options

FT Upgrading

Diesel

Naphtha

Lubes

Methanol and DMEOlefins, Gasoline

HydrogenOthers

GTL PROCESS

GTC or GTFC TECHNOLOGIES

Reforming

MethaneCH4

GTL: Gas to Liquids (FT- Fischer Tropsch)

GTC: Gas to Chemicals

GTFC: Gas to Fuels and Chemicals

Synthesis Gas

CO + H2

PREMIUM PRODUCTS

O2

H2O

Page 12: Gtl-pros,Cons and Developments

Industry moves from GTP to “XTP”

Conversion Technologies

FT Upgrading

Diesel

Naphtha

Lubes

Methanol and DMEOlefins, Gasoline

HydrogenOthers

GTL PROCESS

GTC or GTFC TECHNOLOGIES

ReformingMethaneHeavy oil

CoalPetcokeBiomass

Synthesis Gas

CO + H2

Gasification

BP: XTP focus

Page 13: Gtl-pros,Cons and Developments

Natural Gas

CO and H2“Syngas”

HYDROGEN METHANOL

MTBE

Formaldehyde

Aceticacid

Ammonia/FertilizerRefineries

Today’s GTP business: ~20 bcfd (7%) of world gas

Ammonia: 12 bcfdRefineries: 6 bcfd Methanol: 3 bcfd

Page 14: Gtl-pros,Cons and Developments

Natural Gas

HYDROGENWax/Syncrude METHANOL

Clean Diesel Jet

Fuel

Naphtha

Lubricants

MTBEFuel (M15, power)Gasoline

Olefins

Formal-dehyde

Aceticacid

AmmoniaRefineries

DME

Tomorrow’s GTP business: >40bcfd (2020 estimate)

CO and H2“Syngas”

GTL Fischer Tropsch

Shift from chemicals to designer fuels

Page 15: Gtl-pros,Cons and Developments

What is DME? “Synthetic LPG”

Dimethyl-ether(DME)

Methane

Methanol

Water

Propane

Butane

Hydrogen Carbon Oxygen

1.4 tons MeOH to 1 ton DME

LPG

Page 16: Gtl-pros,Cons and Developments

Major DME Markets

PowerGeneration

LPGLPG Alternative

Clean Diesel Fuel

DME

Three Primary Applications...CFC

Replacement

Today Future is now

Ready

Commercial

DemonstrationReady 2010

2

1

3

Page 17: Gtl-pros,Cons and Developments

XTP offers large markets

1100

140Methanol to Olefins

200DME (power, diesel)

130Ammonia

215Methanol to LPG (DME)

900Methanol as/to gasoline

34Methanol, chemical

3800Crude Oil

140 (actual)Benchmark: LNG

Product market sizeMMTPA

Target Products

GTL-FT Diesel

Page 18: Gtl-pros,Cons and Developments

0

50

100

150

200

250

300

2000 2020 2040 2060 2080 2100

Heavy Oil

Diesel / GasolineFrom oil

Electricity

GasHydrogen

Data source:WEC; with modification

Synthetic fuelsand biofuels

Liquid Fuels

GaseousFuels

Energy Demand (x1018 J )

Automotive Fuel Demand Scenario

Source: IEA

Page 19: Gtl-pros,Cons and Developments

The dangers of technical prediction

• Radio has no future. Heavier-than-air flying machines are impossible. X-rays will prove to be a hoax - William Thomson, Lord Kelvin, 1899

• There is not the slightest indication that nuclear energy will ever be obtainable. It would mean that the atom would have to be shattered at will -- Albert Einstein, 1932

• There is no reason anyone would want a computer in their home -Ken Olson, president of Digital Equipment Corp. 1977

• Drill for oil? You mean drill into the ground to try and find oil?You're crazy. - Drillers who Edwin L. Drake tried to enlist in 1859

• Nuclear-powered vacuum cleaners will probably be a reality in 10 years - Alex Lewyt, president of vacuum cleaner company Lewyt Corp., 1955

Page 20: Gtl-pros,Cons and Developments

Role of GTP in host countries

• Gas resource holder increasingly value GTP

− Qatar: “GTL Capital of the World”

− Trinidad: “GTP Capital of the World”

− Algeria: Tinrhert GTL bid

• Key advantages

− Diversity of products and markets

− Acceleration of gas monetization

− Higher in country investments

− Industrialization of country

Page 21: Gtl-pros,Cons and Developments

Pros and cons of GTP

• Deep liquid markets

• Host country appeal

• Premium “designer”products

• Robust economics

• Proven technologies

• Scaleability

• Capital intensive

• Scale-up risks

• Poor efficiencies

• Aversion to new products

PROS CONS

Page 22: Gtl-pros,Cons and Developments

Comparison GTL and Methanol/DME

NewTraditionalFuel markets

70/8260/77Thermal/carbon efficiency

23Process steps

Global ChoiceTo be provenTechnology

Methanol/DMEGTL-FT

Page 23: Gtl-pros,Cons and Developments

GTL Emissions and Efficiencies

GTL-FTToday

To Customer60 Btu’s77 Carbons

Fuel Losses (CO2)23 Btu’s23 Carbons

Water Make17 Btu’s0 Carbon

Gas Feed100 Btu’s100 Carbons

GTL-Today

To Customer

Fuel Losses (CO2)2

Water Make

0

Gas Feed GTL-FTTomorrow

To Customer73 Btu’s90 Carbons

Fuel Losses (CO2)10 Btu’s10 Carbons

Water Make17 Btu’s0 Carbon

Gas Feed100 Btu’s100 Carbons

GTL -Tomorrow

To Customer

Fuel Losses (CO2)

Water Make

Gas Feed

12CH4 + 5.5O2 C12H26 + 11H2O

GTL PROCESS: 1. Inherent energy loss through water make

2. Process fuel energy losses (CO2 make)

CH4 + 2O2 CO2 + 2H2O

Energy Efficiency: 60% 73%

Carbon Efficiency: 77% 90%

Page 24: Gtl-pros,Cons and Developments

Outline

• Syngas: Business case

• The case for Gas To Products (GTP) and XTP

− Products and markets

− Pro’s and con’s

− Technologies

− Global projects

− Economic viability

• The future of XTP

Page 25: Gtl-pros,Cons and Developments

GTL technology challenges

Gas Plant

Reformer FT Plant Upgrading

ASU

CH4

O2

CO+H2 (-CH2-)n

NaphthaDiesel

Page 26: Gtl-pros,Cons and Developments

Gas Plant challenges

Gas Plant

Reformer FT Plant Upgrading

ASU NaphthaDiesel

• Conventional, proven technologies

• Multiple vendors

• Technologies:

• Separation (liquids, LPG, C2);

• C2+ in feed: pre-reformer required

• Dehydration

• H2S: must be removed

• CO2: inert in FT, a reactant in methanol synthesis

Page 27: Gtl-pros,Cons and Developments

ASU challenges

Gas Plant

Reformer FT Plant Upgrading

ASU NaphthaDiesel

• Multiple vendors (APCI, Air Liquide, Linde)

• Rapid increase in size: 5000 tpd offered

• Oryx: 2 x 3500 tpd corresponding to 2 x 17,500 bpd GTL-FT

• Preferred business model: vendor owned/operated – O2 sales

• Synergies: N2 for EOR, noble gases

• High reliability, low technical risk

• Offshore application: safety concern; steam reforming preferred (CR?)

Page 28: Gtl-pros,Cons and Developments

Reformer challenges

Gas Plant

Reformer FT Plant Upgrading

ASU NaphthaDiesel

• Multiple technologies available (SMR, ATR, Comb. Ref, POX)

• Expensive, inefficient process: ~1000C, 40bar;

• H2/CO (CO2) ratio management: syngas processing

• Leading vendors: HTAS, Lurgi, DPT

• Atlas Methanol: largest reformer in the world (Comb. Ref);

Page 29: Gtl-pros,Cons and Developments

FT plant challenges

Gas Plant

Reformer FT Plant Upgrading

ASU

• 11 technologies under development: lots of patents!! Mostly Co catalysis.

• Available through licensing: BP, Syntroleum, Axens/IFP/ENI

• Large reactors: >10m diameter; slurry technology: ~20,000bpd capacity

• Mild conditions: ~250C, ~20bar

• Challenge: heat management!

• Wax/catalyst separation

• Challenge for high “alpha” (minimize C1 make)

• Catalyst life, regeneration, cost

Page 30: Gtl-pros,Cons and Developments

Upgrading challenges

Gas Plant

Reformer FT Plant Upgrading

ASU

• Conventional refinery technologies: hydrocracking (H2 required)

• Vendors: UOP, Syntroleum, Chevron,…

• Product mix: naphtha, diesel (jet, kerosene options)

• Option: high quality lubestocks (Shell, ExxonMobil)

• Proven, very low risk technologies

Page 31: Gtl-pros,Cons and Developments

MeOH/DME plant challenges

Gas Plant

Reformer MeOH Plant

MeOHDehydrationASU

CH3OH

CH3OCH3

• Multiple proven technologies

• Vendors: Lurgi, DPT, HTAS, Toyo, Kvaerner, JFE, …

• Direct versus indirect DME synthesis: different degrees of integration

• DME synthesis simple and cheap; integrated plants same costs

• Smaller plant sizes: ~5000tpd capacity corresponds to ~ 15,000bpd FT equivalent)

• However: ~>5000tpd, low cost feedstock and economic fuel

• New MeOH/DME conversion reaction: MTO (UOP, XOM), MTP (Lurgi)

Page 32: Gtl-pros,Cons and Developments

Lurgi MTP®: Simplified Process Flow Diagram

Propylene474 kt/a 1)

Gasoline 185 kt/a

Fuel Gas internal use

Process Water 935 kt/afor internal use

DMEPre-Reactor

ProductConditioning LPG

41 kt/a

Water Recycle

Olefin Recycle

Methanol1.667 Mt/a = 5000 t/d

Product Fractionation

MTP Reactors(2 operating + 1 regenerating)

1) Propylene Purity 99.6 wt. %

Page 33: Gtl-pros,Cons and Developments

Lurgi MTP in China

Page 34: Gtl-pros,Cons and Developments

Outline

• Syngas: Business case

• The case for Gas To Products (GTP) and XTP

− Products and markets

− Pro’s and con’s

− Technologies

− Global projects

− Economic viability

• The future of XTP

Page 35: Gtl-pros,Cons and Developments

The birth of the GTL business: Qatar “World Capital”

SasolChevronNigeria35kbpd

BP“Colombia Condor”

~35kbpd

Sasol“Oryx”

35kbpd (70kd/d train 2)

Shell“Pearl”

140kbpd (Nov. 2003)

ExxonMobil“AGC 21”

160kbpd (July, 2004)

ConocoPhillipsSasolChevron

Marathon/SyntroleumPOSTPONED

Heritage Plants Shell Bintulu

PetroSA MossgasTinrhertAlgeria35kbpd

Page 36: Gtl-pros,Cons and Developments

Oryx Plant Inaugurated June 6th 2006

“As we stand here today to celebrate the inauguration of Oryx GTL, we arechanging the world’s energy paradigm with gas-to-liquids (GTL) technology.”- His Excellency Abdullah Bin Hamad Al-Attiyah, Second Deputy Premier,Minister of Energy and Industry, Qatar, and Qatar Petroleum chairman.

Plant Statistics

34,000 bpd capacity

- 24,000 bpd Diesel

- 9,000 bpd Naphtha

- 1,000 bpd LPG

Construction Start – Dec 2003

Project Completion – June 2006

Believed to have cost $1.5Billion

Commissioning Progress

Syngas plant operational

Superheater problem

Page 37: Gtl-pros,Cons and Developments

Large Methanol/MTO/DME plants (built, proposed)

Japan DME Ltd5,000 TPD

Iran Methanol 1- 55,000 TPD

Memo: Not including <5,000 MTPD methanol plants

Trinidad – (2) 5,000 TPD Atlas

Methanol Holdings

Oman Methanol - 3,000 TPDQatar Methanol - 6,750 TPD

DME Int’l Corp.2,500-4,500 TPD

Nigeria/Eurochem MTO7,500 TPD

Iran DME2500 TPD

Qatar/PetroWorld>12,000 TPD

China DME Plants1,000 TPD

Methanol

Methanol for Power/OlefinsDME

Iran/Lurgi MTP2500TPD

Page 38: Gtl-pros,Cons and Developments

Atlas Methanol Plant (5000tpd = 15,000bpd GTL)Methanex, BP, Lurgi

Page 39: Gtl-pros,Cons and Developments

DME in China

Shandong JiutaiChemical Industry30,000 T/yr- 2003 100,000 T/yr-2005

Luthianhua Group Inc, Sichuan10,000 T/y – 2003 110,000 T/y – 2006

Shanghai Coking/HuayiCompany5000 T/y – Apr.2006

Xinao Group10,000 T/y – Jan. 2006

Yuannan JiehuaChem. Group

150,000 T/y – 2007Under construction

Shenhua Ningxia Coal Industry Group

210,000 T/y -2007 To 830,000 T/y - 2008

Yankuang Group200,000 T/y - 2009

Shandong Jiutai Chemical industry 1 million T/y - 2009 Xinao Group400,000 T/y - under construction Mengda Group1 million T/y – under planning Luthianhua Group200,000 T/y – under planningChina Nat. Coal/Sinopec3,000,000 T/y – 2010Yigao Chemical Co20,000 T/yr– Aug 2006 wet commiss.

Shanxi Lanhua Sci--Tech100,000 T/y – under construction, 2007 (Jincheng)Lanhu Group1,000,000 T/Y-under planning

Hubei Zhongjie Petrochem. Group 100,000 T/y – under const. - 2007

Hubei Biocause Pharmaceutical100,000 T/y – under planning -2007

Memo: This is a work in progress, Ron Sills, Sept. 19, 2006

YearThousands

MT/yr2004 402005 1552006 2752007 9352008 15552009 41552010 8355

1 MT DME requires 1.4 MT methanol

Page 40: Gtl-pros,Cons and Developments

Methanol and DME Competitiveness in fuel markets

Methanol (DME) Price/Cost, $/ton

50(70)

100(140)

150(210)

8

4

2

00

$/M

MB

TU

Future?

Conventional Fuels at $20/bbl crude

6“Atlas”

(0)

HistoryConventional Fuels

at $40/bbl crude Conventional Fuels

at $40/bbl crude

Page 41: Gtl-pros,Cons and Developments

Hydrogen power projects

Page 42: Gtl-pros,Cons and Developments

GTP Economics

• Benchmark LNG: GTL reached parity with LNG in ~ 2000

− Robust economics at $20 crude (2000)

− Fantastic economics at higher crude prices!? (yes, since GTL product prices are directly linked to it)

− However, EPC cost increases: $70k/bbl (1980) to $25k/bbl (2000)to $50k/bbl and beyond (2006)

• Methanol and DME can be delivered at $4-6/MMBTU and become viable as fuel above $25 crude oil

− DME is commercial reality in China

− MTP, MTO projects underway (new low cost technology)

Page 43: Gtl-pros,Cons and Developments

Developments in GTP

• Scaleability: from big (Qatar) to small (Trinidad)

• Floating applications

• Flare busters (microchannel technologies)

• Reduced Capex through R&D and value engineering

• Gas refinery

− Integration of different plants

− Further conversion of primary products into consumer products

− Integration of LNG and power

Page 44: Gtl-pros,Cons and Developments

Technology Benchmark: Syntroleum FPSO

310 M

65 M

16,300 bpd GTL150 mm-scfd Gas$1.2b EPC20,150 M2

Page 45: Gtl-pros,Cons and Developments

BP GTP Profile

• World class R&D group (~60 people)

• Relationship with Berkeley, Caltech, DICP (~60)

• Broad GTP product portfolio

• Mini-reactors, pilot plants, demonstration plant

• World scale methanol plant (with Methanex)

• World class partners

• Portfolio of project options

• Decarbonized fuel projects

• “Conversion”

• Center of Excellence in Group Technology

Page 46: Gtl-pros,Cons and Developments

Conclusion

• GTP and XTP technologies

− Available, mostly mature, economic

− Need for better technologies

− Must have for energy companies

• Syngas is a key intermediate in 21st century

− Feedstock versatility

− Premium liquid fuels (conventional and new)

− Syngas refinery

Page 47: Gtl-pros,Cons and Developments

Thank you! Questions?

Page 48: Gtl-pros,Cons and Developments

Back-up slides

Page 49: Gtl-pros,Cons and Developments

Gas by Bag

Page 50: Gtl-pros,Cons and Developments

Summary

• GTP technologies offer new MULTIPLE options to monetize gas

− LARGE, new markets for gas

− Mature technologies and proof of technologies

− Product values tied to crude oil (diesel, LPG, etc)

• GTP options are welcomed/required by gas resource holders

− Product diversification

− Gas value optimization

− Country industrialization (more in country investments, jobs)

− NO MORE STRANDED GAS

− NO MORE FLARING

Page 51: Gtl-pros,Cons and Developments

GTP project challenges

• Size of projects− ~$1B: Oryx GTL in Qatar − ~$0.5B Atlas methanol in Trinidad− ~$5 – 10B: integrated 150,000bpd projects

• Marketing− Fuel blends: OEMs and customers− FT/diesel; DME/LPG

− Novel fuel applications: OEM’s, customers, HSE, demos!− MeOH, DME in gas turbines; DME in diesel engines

− Distribution and marketing (premiums)• Value chain optimization− Sub-surface to ship − Loading/unloading; pipeline transport− Shipping: larger and dedicated ships

Page 52: Gtl-pros,Cons and Developments

The Gas Economy

• Natural Gas:

− Step-child in 20th century

− Dominant fuel of the 21st century

• Abundant, inexpensive supplies (especially stranded gas)

• Resource Push

− Need novel gas transportation options (beyond pipelines/LNG)

− Need new markets for gas

• Market Pull

− Increased costs of conventional liquid fuels

− Need for cleaner, improved liquid fuels

− Need for low cost chemical feedstocks and improved processes

Need and Opportunity

for Gas To Products, GTP

Page 53: Gtl-pros,Cons and Developments

Overview: syngas production

• Dominant technology

• Ni catalysis

• Heated tubes (large multi-tubular reactors)

• H2/CO: high

Steam Methane Reforming (SMR)

Oxygen-blown non-catalytic partial oxidation

SGP

• Not widely used (Shell does)

• High temperature, no catalyst

• H2/CO: <2 !

Page 54: Gtl-pros,Cons and Developments

Overview: syngas generation

• Autothermal Reforming (ATR) Part of the natural gas is cvombusted with oxygen in a sophisticated burner. The hot effluent is reformed over a conventional reforming catalyst withadditional natural gas. Advantage: the heat of combustion is used for the endothermic reforming reaction. Simple, ceramic clad reactor.

• Combined or Two-Step Reforming: Steam Methane Reforming + Autothermal Reforming. Natural gas feed is split into two parts. One part is added to the primary steam methane reformer, and the other part is sent directly to the secondary reformer. The effluent from the primary steam reformer is also sent to the ATR.

• Advanced Gas Heated Reformer: Uses compact heat exchange reformer, with gas and steam feed, followed by a secondary oxygen-blown ATR. The effluent gas from the ATR provides high-grade heat directly back to the heat exchange reformer. Advanced design for heat exchange reformer simplified internal design.

AutothermalReforming

ATRSMR/

Combined Reforming

Advanced Gas Heated Reforming Integrated with ATR

Page 55: Gtl-pros,Cons and Developments

Glossary – syngas generation

• Compact reforming represents a novel mechanical design approach to conventional SMR. The reformer design resembles a conventional shell and tubeheat exchanger, which is much more “compact” than the conventional SMR furnace design configuration.

• Catalytic Partial Oxidation (CPOx). The hydrocarbon feed stream, oxygen and steam are mixed upstream from the catalytic reactor. All the chemical conversion takes place in the reactor and no burner is used. feature a combined ignition and a reforming noble metal catalyst operating at very low residence time (very high space velocity).

Catalytic Partial Oxidation

Compact Reformer

Page 56: Gtl-pros,Cons and Developments

Remote Gas Monetization Options

PIPELINE PUSHING THE LIMITS ($25B)

LNG TECHNOLOGY OF CHOICE TODAY

GTL (FT) BIRTH OF A NEW INDUSTRY

METHANOL TRANSITION FROM CHEMICAL TO FUEL

DME “SYN-LPG”, ASIAN TIGER AWAKENS

CNG A NICHE FOR SMALL & SHORT?

HYDRATES MOVING A LOT OF WATER

GAS TO WIRE DC TRANSMISSION COST DECREASING

GAS BY BAG A VERY SMALL NICHE