Natural gas is the fastest growing energy resource in most regions of the world, driven by superior environmental performance as well as attractive economics for baseload use in power generation. However, much of the world's gas resources are remote from consuming markets, resulting in a drive to develop new technologies to allow efficient and cost-effective monitization of these stranded assets. Figure 1.1 provides a breakdown of global reserves, indicating the relatively low reserves in the major consuming centers of North America, Europe and Asia. The new Nexant study on the utilization of remote natural gas, Stranded Gas Utilization: Steps to Commercialization, provides an in-depth quantitative and qualitative analysis of the various end uses and production processes for converting large, remote natural gas reserves to viable commodity products, both conventional fuels and fuel substitutes as well as commodity petrochemicals.
Nexant reviews the status of each of the gas-based technologies listed below. The expectations and hurdles for commercialization and the performance of those technologies are evaluated. FuelsConventional fuels
- Naphtha and Diesel fuel (GTL)
- Fuel grade methanol
−For power
−For fuel
Alternate fuels
- DME (dimethyl ether)
−For power
−Diesel substitute
- MTG (methanol to gasoline)
- Fuel Cells
−Vehicle applications
−Stationary applications
Commodity Petrochemicals
- Chemical grade methanol
- Methanol to olefins
−MTO (Methanol to olefins)
−MTP (Methanol to propylene)
- Ethylene from Fischer-Tropsch (F-T) liquids
−Ethylene from F-T naphtha
−Ethylene from F-T gas oil
- n-Paraffin (C9-C17) from F-T Middle Distillates
- Ammonia and Fertilizers
Nexant compares the cost to produce each commodity fuel or petrochemical at a remote location as well as the costs to ship it to major consuming regions. Resulting delivered costs are compared to forecast domestic prices for these regions. Cost estimates are made for 2003, Quarter 3.
Economics are developed for our estimates of conceptual representative plants for each of the technology/product groups, such as diesel fuel from F-T synthesis, DME, etc., based on Minformation provided by the various technology holders, supplemented by publicly available information and Nexant's own engineering experience and expertise. Where appropriate, these costs of production are compared to conventional technology. These economic comparisons are made for those commodity fuels and chemicals whose processes lend themselves to comparison with conventional technology currently in place, most prominently the commodity chemicals.
Economic comparisons of the fuel products compare the delivered costs of the product from the developing technology to domestic prices characteristic of the current market. The study includes detailed technology, economic, and commercial evaluations:
- Technology Evaluation - A detailed review and status of the various process routes including: patent review and analysis, technology holders and offerers, licensor package analysis and cost of production development for what would be considered representative of the technology, and identification of the stage of process package commercial development with a listing of actual and announced projects.
Due to the increased importance of emerging gas-to-liquids fuel technologies, for these technologies we also review patent activity for potential new processes or catalyst systems For each of the GTL technologies we analyze and compare qualitatively the important process design features and variables:
−Syngas conditioning
−Catalyst handling
−F-T product synthesis and recovery (where appropriate)
−Carbon efficiency
−Crude product handling
−Level of research and development
−Potential for and implications of improvements
In addition, we examine the key areas of the process designs, discuss how the various
technologies differ and comment on the advantages and disadvantages of each:
- Reactor type (e.g. slurry, tubular packed, etc.)
- Catalyst system (e.g. precious vs. non-precious metal, supported vs. non-supported, heterogeneous vs. homogeneous, etc.)
- Process design (process integration, operating aspects)
- Product slate
- Economic Evaluation - Local cost of production estimates are developed for each of the technologies for a stranded gas location with significant remote gas reserves. Costs are developed on an "ex-plant" and delivered basis, depending on the likely market destination for each product. Sensitivities are performed for gas cost and effect of capital cost and estimates are made as to potential improvements and their implications.
- Commercial Evaluation - Nexant performs an analysis of the major fuel products included the technical evaluation. This analysis is performed on a global and regional basis, with attention to regional demand and logistical shipping issues. The commercial analysis also regards the limitations of existing infrastructure and delivery systems for the various products and the implications on product competitiveness.
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