The complexity of FT/GTL processes combined with the memory of the recent oil price crash have made operators cautious. But as process knowledge and costs are understood, GTL plant construction is moving ahead to monetize stranded gas.

"Stranded gas" is an all-encompassing term. For the purpose of this article, stranded gas is any hydrocarbon-based gas that is uneconomic to deliver to market. This includes associated and flared/vented gas, and gas that is re-injected purely for regulatory compliance rather than for reservoir-pressure maintenance. Some of the factors that determine when a pipeline is profitable include resource volume, transport route, regulatory environment, market size and demand growth. Sometimes, excess reserves can be considered stranded, since these would require a paltry delivery rate to avoid oversupply of local markets. Negative economics can also be due to technical complexity or expense associated with recovering/gathering the gas. Stranded gas is essentially gas that is wasted or unused. Whenever one thinks of stranded gas, the primary goal is an alternative to pipeline transport.

A recent study by Zeus Development Corp. and IHS Energy identified some 450 Tcfg stranded in fields greater than 50 Bcf that can be gathered and produced for less than $0.50/MMBtu. (1) Many larger fields can produce gas even cheaper. Recent price spikes suggest that in many markets, 10-year contracts could be secured for more than $3.5 to $4/MMBtu, which broadens the economic viability of smaller fields. Worldwide proved gas reserves are estimated at 5,226 Tcf. (2)

Depending on how one defines "reserves" and "stranded," estimates of stranded gas vary from 900 to 9,000 Tcf. (3,4) The latter number would convert to about 900 billion bbl of synthetic hydrocarbon liquids. Although such a quantity seems improbable to achieve, any reasonable fraction of this amount is significant and, therefore, worth investigating. This article reviews the current status of technologies that industry is using to bring this otherwise unused energy to markets. These technologies include gas conversion to LNG, gas to liquids (GTL), gas to hydrates and gas to electricity.

LNG

The conventional solution is gas compression/cryogenic cooling to produce liquefied natural gas. Worldwide LNG supply has more than doubled during the last 20 years, to nearly 6 Tcf/yr. The liquefied gas accounts for 4% of world gas consumption, and 23% of world gas exports. (5) With new LNG export facilities in Trinidad, Qatar and Nigeria, plus proposed or developing projects in Australia, Norway, Angola, Egypt, Peru, Venezuela, Iran and Russia, LNG production could again double within a decade. Floating LNG plants have been proposed to produce stranded offshore reserves. LNG will likely play an increasing role in development of giant gas fields, since most countries--especially net oil importers--are keen on developing their gas reserves, however stranded, for greater energy independence and extending domestic oil reserves where applicable, as well as for environmental reasons.

Conventional LNG production requires minimum reserves of several Tcf, investment of more than $1 billion and long-term (15 year+) contracts, although in some cases these have been getting shorter. It also requires insulated LNG supertankers and specialized offloading terminals. Nevertheless, LNG will figure prominently in monetizing stranded gas. Costs to liquefy gas and construct LNG tankers fell 30% over the past two decades. (6) One report cites a 60% cost reduction since 1989 for constructing the liquefaction plant alone, and incremental increases in efficiency and capital-cost reduction will undoubtedly continue. (1) Further cost savings can be achieved by combining LNG with GTL facilities, and there are several plans/studies underway to do just that in Nigeria, Egypt, Qatar, Australia and Iran.

Small-scale LNG plants are under development and could have considerable impact on smaller volumes of stranded gas, which, cumulatively, are enormous. These units are increasingly being used for peak shaving at power plants and at LNG-vehicle fueling stations. It is likely that these technologies will transfer to applications in monetizing stranded-gas as designs/efficiencies improve and government regulation increases. Turbo-expansion plants can take advantage of wasted cooling due to expansion from pressure drops, whether at "city gates" or at the wellhead, and Stirling Cycle cryogenic plants are being considered. Praxair is developing a novel thermo-acoustic engine for cryogenic use that has no moving parts. SINTEF Energy Research and ABB Gas Technology are testing a small-scale gas liquefaction system that uses conventional technology and a multicomponent refrigerant. CryoFuel Systems is installing two 5,000-LNG gal/day units for stranded-gas wellsite use in Texas and California. There are many more examp les.

GTL

GTL is not new. Creating methane from hydrogen and carbon monoxide was first achieved by Paul Sabatier and Jean Senderens in 1902. Franz Fischer and Hans Tropsch further developed the synthesis to mainly oxygenated products and liquid hydrocarbons in 1923. GTL is an application of the basic Fischer-Tropsch (FT) process, where synthesis gas (or syngas, H+CO) is reacted in the presence of an iron or cobalt catalyst. End products are determined by the length of the hydrocarbon chain which, in turn, is determined by catalyst selectivity and reaction conditions, Fig 1. Possible end products include kerosine, naphtha, methanol, dimethyl ether, alcohols, waxes, synthetic diesel and gasoline, with water or carbon dioxide produced as a byproduct. Natural gas or coal can be the raw feedstock.