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Chemical Ways for Natural Gas Monetisation

In early 2018 Natural Gas prices were at their highest level since 2014. According to US forecasts, gas prices will increase 30% by 2020 in comparison to 2016 levels and will outreach metallurgical coal.

Due to stricter environmental regulations in the Oil & Gas sector, the next couple of years (2018-2020) offer a great opportunity for chemical ways of gas monetisation, converting the gas to higher margin products, where gas constitutes a major part of operating costs - technologies such as:

  • Ammonia & more complex bulk fertilizers Urea & Ammonium Nitrate
  • Methanol & its derivatives Olefins, Formaldehyde, Acetic Acid

Growing crude-oil to gas price ratio has improved competitiveness of synthetic fuels produced via Gas-To-Liquide (Fischer-Tropsch) and Methanol-To-Gasoline (MTG) process in comparison to traditionally refined products, and this despite the recent lower oil prices.

While Ammonia and Methanol are both mature technologies (the first Ammonia industrial plant was put in operation in 1913 and Methanol first large-scale unit in 1928), synthetic fuels synthesis from NG based on GTL (Fischer-Tropsch) process is a relatively new technology - only a handful of large-scale industrial plants exist.

The MTG process is an even “younger” technology, first commercialised in 1985, however it is still waiting for a first long-term & large-scale industrial operation.

For all these technologies, economy of scale is an important factor as production cost decline as capacity increases. As a result, the capacity of modern Ammonia and Methanol single-train plants generally exceed 3,000 MTPD and even higher capacities are now being envisaged by leading engineering companies.

With regards to GTL technology, the largest plant has a 140,000 bbl/day nameplate capacity. It is worthwhile to mention that local conditions greatly influence the viability of these projects and their selected capacities. For example, Medium to small GTL or MTG units can become a viable option for gas monetization at isolated remote Oil fields, where gas flaring is highly penalized.

The first step for all these technologies involves syngas production in a steam reforming process. Thereafter syngas of a desired composition is sent to the next catalytic step of end-product generation. The importance of reforming technologies should not be underestimated due to its major contribution to capital costs as well as high influence on NG consumption, or in other words energy efficiency of the whole technological process.

Depending on the end-product type, plant capacity and various site factors, different types of reformers are used in the process: tubular, auto-thermal, heat-exchanging reformers or a combination of these.

For Ammonia technology, tubular reforming is traditionally combined with air-fired autothermal reformer to introduce nitrogen required for ammonia synthesis. Ammonia technology is a multi-stage process, which includes a gas preparation section followed by sulphur removal and in some cases pre-reforming, reformer, high- and low-temperature shift, carbon dioxide removal, methanation, and finalised by ammonium synthesis loop.

Worldwide Ammonia production reaches around 150 mln tons, 90% of which is used as a fertilizer - only a fraction is traded and applied in its original form; the majority goes to the production of more complex N, P, K fertilisers. It is worth mentioning two of them, which are produced from ammonia feedstock: urea and ammonium nitrate.

Urea is a product of ammonia interaction with carbon dioxide, which is removed as a by-product from ammonia production. Ammonium Nitrate is produced by ammonia reacting with nitric acid. The latter is also produced from ammonia through its air-oxidation to nitrogen oxides, which are further absorbed by water to form nitric acid.

NG conversion to Methanol also includes tubular steam reforming, or carbon-dioxide reformer, in cases where free CO2 is available at site, in order to optimise the ratio of resulting components for further methanol synthesis.

In modern large-scale plants, licensors offer different reformer designs: tubular, autothermal oxygen-fired reformers to boost energy efficiency and achieve optimal components ratio for methanol synthesis.

A number of methanol reactor designs have been developed by leading engineering companies ensuring efficient heat-removal from the catalytic reaction zone and thereby maximising methanol output.

Crude methanol is then sent to the distillation section to remove water, higher alcohols, ethers, ketones, etc. to make a final high-grade product.

Gas-To-Liquid technology is a process of liquid hydrocarbon synthesis from carbon mono- & dioxide and hydrogen (syngas), known as a Fischer-Tropsch (F-T) process.

It was first demonstrated in 1925 and successfully implemented in Coal-to-Liquid plants; however, it took nearly 70 years until it was commercialised in the first Gas-to-Liquid plant. This is explained not only through the high commercial risks due to fluctuation and interdependence of oil and gas prices, but also due to the extreme complexity of the GTL technology.

The GTL process includes three main sections: syngas generation, F-T synthesis to syncrude and its refining section to produce the end products – diesel, gasoline, jet-fuel. Various types of reformers have been designed for natural gas conversion to syngas in GTL applications: tubular reformer, partial oxidation and autothermal reformers (both oxygen fired) as well as combinations thereof.

F-T syntheses output and selectivity strongly depend on temperature conditions – even a small temperature rise leads to undesired wax formation. Therefore, efficient heat removal from highly exothermic reactions is a primary goal for all FT reactor designs. Four types of F-T reactor are used to this day: multi tubular fixed bed reactor, entrained flow reactor, slurry reactor, fluid-bed and circulating catalyst rector.

Despite of all the high-tech process enhancements, F-T products still contain a large amount of wax, and thus in order to maximise the yield of high grade clean diesel fuel, the F-T syncrude undergoes middle-distillate hydrocracking process.

MTG is an alternative to GTL conversion and converts methanol to low-sulphur high-octane gasoline. As opposed to F-T process, MTG syntheses excels through high selectivity for one product – gasoline, due to zeolite catalyst at the heart of the process. MTG synthesis is conducted in multiple-reactor systems, where each reactor is taken out one by one for catalyst regeneration. Such a technological arrangement ensures process continuity and product quality stability.

MTG process was first developed in mid-1970s following the wave of gas and oil price decoupling. It was commercialised soon after at the New Zealand plant, however it still wasn’t a widespread industrial technology, mainly due to economic reasons dictated by ever changing gas & oil prices and thereby facing strong competition from traditionally refined gasoline.

The selection of NG monetisation options and specific end-product / technology(-ies) depend on a number of factors, like gas-field location, availability of other resources, in particular water, local product demand, transport logistics for products offtake, nearby competing production facilities and not least the trend of gas-to-oil prices ratio development.

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