Pinched this off another thread. Probably be a cold day "down under" before the greeniacs let this go through...
Swiss firm shows plan to turn natural gas into gasoline
ALTERNATIVE: Methanol produced would help prevent ice in the pipeline.
By ALAN BAILEY
Petroleum News
Published: April 30th, 2011 09:08 PM
Last Modified: April 30th, 2011 09:09 PM
With an increasing air of pessimism around the prospects for a pipeline to export
natural gas from the North Slope, there is talk of alternatives for monetizing the
vast quantities of gas stranded in Arctic Alaska.
One alternative was discussed by Deo van Wijk, chairman of Swiss company Janus
Methanol AG, before the state House Resources Committee. Van Wijk described the use
of natural gas to synthetically produce gasoline for export from Valdez.
Gasoline production would involve two stages: production of methanol from natural
gas on the North Slope, and production of gasoline from the methanol in Valdez.
Methanol produced on the Slope would be blended with crude oil for transportation
through the trans-Alaska oil pipeline to Valdez, where it would be distilled out of
the oil for processing into gasoline.
In addition to providing a market outlet for North Slope gas, the proposal would
boost the volumes of fluid flowing down the trans-Alaska pipeline. Because methanol
is an excellent antifreeze, the mix would help prevent problems with ice forming in
the line, van Wijk said.
The processes involved are already in commercial operation in several parts of the
world, van Wijk said. Economies of scale require gas supplies of at least 640
million cubic feet a day, he said.
The two-stage process of manufacturing gasoline from natural gas is an alternative
to the perhaps more familiar gas-to-liquids, or GTL, process, in which natural gas
is converted to a fluid very similar to diesel fuel. But GTL produces wax as a
byproduct, and wax can cause problems with pipeline clogging, van Wijk said.
Exxon originally developed the process, known as MTG, and successfully constructed
an MTG plant in New Zealand in the 1980s, van Wijk said. However, falling oil
prices in the 1990s rendered that plant uneconomic, he said.
Some years later the Chinese resurrected the process to produce gasoline from
methanol generated from coal, van Wijk said.
Improved technology
Over the years Janus Methanol engineers have improved the methanol generation part
of the process, eliminating the need for processing modules that were part of early
plant designs and dramatically reducing costs, while increasing production, he
said.
But with world demand for methanol itself being quite low, the best use for the
huge volumes of methanol that can now be produced is to feed the methanol into the
MTG process, van Wijk said. Gasoline produced from methanol contains relatively low
levels of benzene and no sulfur; the process for generating the gasoline produces
only gasoline and water, he said.
Van Wijk said his company is interested in the possibility of natural gas to
gasoline production in Alaska, and he has done estimates of the economics. Assuming
that construction costs in Alaska would be double those elsewhere in the U.S., the
construction of a complete system that could produce about 63,000 barrels a day of
gasoline would come in at about $5.2 billion, van Wijk said. With labor costs for
operating the plant perhaps averaging $150,000 a person and taking into account all
costs, including the return on investment in the plant and depreciation, gasoline
could be delivered for shipment from Valdez at $2.65 to $2.85 per gallon, including
a $1.45 margin, he said.
"If you compare that with today's wholesale prices in excess of $3 per gallon, you
still have more margin," van Wijk said.
450,000 barrels
Those figures describe an operation that would consume only a portion of the gas
potential of the North Slope. If the entire 4.5 billion cubic feet a day of North
Slope gas, currently envisaged flowing down a North Slope gas pipeline, were
instead to be converted into gasoline, it would result in gasoline production of
450,000 barrels a day. Such a massive plant would likely take 15 to 18 years to
complete, he said.
The U.S. could reduce its massive oil imports to zero in 10 to 15 years, van Wijk
said.
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