Think small and make the most of associated gas developments

Paul Boughton

The big developments in offshore gas-to-liquid technology will come from thinking very small, say Derek Atkinson and Jeff McDaniel.

Associated gas and stranded gas - gas reserves located far from existing pipeline infrastructure and markets - are potentially abundant sources of energy that are often squandered. Rather than being transported to refineries for processing, stranded gas is often just left in the ground.

Associated gas produced along with oil is frequently disposed of by flaring - a wasteful and environmentally unfriendly process that is increasing subject to regulation - or by re-injection back into the reservoir at considerable expense.

According to the World Bank, 5.25 trillion cubic feet (tcf) of associated gas - the equivalent of 27 per cent of US gas consumption - was flared in 2004. A further 12.5tcf of gas was re-injected(1). The reason? Cost-effective technologies for capturing this wasted resource offshore are not available.

Even the available options for onshore gas, which include liquifying or compressing the gas (LNG or CNG) then shipping it in specially designed tankers, have serious drawbacks, particularly in terms of cost. The economics dictate that new LNG projects are only economically viable for producing gas volumes greater than 500mcfd over distances of 4200km (2500miles) or more. Although CNG is a good option for transporting smaller volumes with throughputs as low as 100mmcfd over shorter distances in the range of 1000-2500km (600-1500 miles) it is too expensive to be used when reserves are more remote.

But thanks to advances in the development of microchannel technology (see Small and beautiful), a much more flexible and economical option for capturing associated gas are on the horizon. Modular gas-to-liquid (GTL) facilities designed to convert handle associated gas into a synthetic liquid crude offshore could become a reality in just a few years. When combined with petroleum crude, the synthetic crude could then be transported to shore along with the produced oil via existing tankers and pipelines, eliminating the need for a separate logistics system to transport the gas to market.

Shrinking the hardware

The GTL process involves two operations: steam methane reforming (SMR), to convert natural gas into a mixture of carbon monoxide (CO) and hydrogen (H2) known as syngas, followed by Fischer-Tropsch (FT) synthesis to convert the syngas into a liquid fuel (see How it works).

Conventional GTL technology is only economically viable for large scale plants producing around 30,000 barrels per day (bpd) of liquid fuel. For offshore GTL, the great challenge is to find ways to combine and scale down the size and cost of the SMR and FT reaction hardware while still maintaining sufficient capacity. This, in turn, depends on finding ways to intensify the processes.

Heat transfer properties play a limiting role in both SMR and FT, so adapting these processes reactions for use offshore depends on developing ways to intensify these processes via enhancing heat and mass transfer properties. This can be done by shrinking the size of the chemical processing hardware. Because heat transfer is inversely related to the size of the channels, reducing the channel diameter is an effective way of increasing heat transfer, and thus intensifying the process by enabling higher throughput.

This is the basic logic behind the approaches being taken by the two main players currently working to develop offshore GTL systems: the UK-based company CompactGTL ( and the US company Velocys (, a subsidiary of the UK-based Oxford Catalysts Group ( Although both are developing integrated SMR/FT systems and are working on the basis of the same principles, the solutions they have come up with are very different.

Mini versus micro

In essence, both companies are developing modular solutions that combine SMR and FR and both have found ways to reduce the size of the hardware. In 'standard' SMR and FT processes the reactions are carried out in 2.5-5cm (1-2inch) diameter tubes, or channels. In the integrated two-stage system being developed by CompactGTL - which designed to incorporate modules weighing less than 25 tonnes and producing 200 bbl/day of liquids - the SMR and FT reactions are carried out in a series of mini-channels, 1 x 0.5cm (0.39 x 0.20inches) (for more information about CompactGTL technology see:

In contrast the Velocys combined SMR/FT system for offshore GTL takes advantage of microchannel reactor technology to shrink the hardware and intensify the processes even further (Fig. 1).

In the Velocys SMR and FT microchannel reactors, reactions take place in microchannels, which have diameters in the millimetre range. For example, the Velocys microchannel FT reactor system, with a footprint of just 2.4 x 8m (8 x 25ft) has the capacity to produce around 300barrels/day. Several FT microchannel reactors, with footprints of just 0.61 x 0.61m (24 x 24inches) can be combined, or manifolded, in parallel to increase production volumes.

In microchannel SMR reactors the heat-generating combustion and steam methane reforming processes take place in adjacent channels (Fig. 2). The high heat transfer properties of the microchannels make the process very efficient. These properties are also used to intensify the FT process.

The basic building blocks of the Velocys microchannel FT reactors consist of reactor blocks containing thousands of thin process channels filled with FT catalyst, which are interleaved with water-filled coolant channels. As a result they are able to dissipate the heat produced by the FT reaction much more quickly than conventional systems, so a more active FT catalyst developed by Oxford Catalysts, the second member of the Oxford Catalysts Group, can be used.

On trial

Both GTL technologies have now reached the trial stage. According to the company's website, the CompactGTL system is currently being trialled in a 1bbl syncrude/week pilot plant at the CompactGTLsite at Wilton in Teeside, UK, and will be tested at a Petrobras site in Aracaju, Brazil.

Meanwhile, Velocys recently entered into a joint demonstration testing agreement (JDTA) with offshore facility developers MODEC, the global engineering firm Toyo Engineering, the steel maker, and other partners to build and operate a 5-10bbl/d microchannel GTL demonstration plant. This demonstration plant, which is designed to accelerate SMR by 200-fold, and FT reactions by 10-15 fold, is expected to be up and running by 2011.

Velocys has also entered into a joint development agreement (JDA) and the Portuguese incorporated holding company, SGC Energia (SGCE), to enable the demonstration and commercialisation of its stand-alone Fischer-Tropsch (FT) microchannel reactor technology. Under the terms of the agreement, Velocys and SGCE will work together to set up an FT microchannel reactor demonstration plant at the biomass gasification facility in the pioneering eco-town, Güssing, Austria, using gasified woodchips as a feedstock. The 100l/day (25US gallons/day) capacity plant is expected to be operational by early 2010. After a six month trial operation, the FT microchannel reactor skid will be transferred to the Wright Patterson Air Force Base near Dayton, Ohio, US, where it will be used in another trial to produce synthetic jet fuel.

Tom Hickey, President at Velocys Inc, is optimistic about by the progress made towards developing offshore GTL. "We are running exciting new trials and have strong agreements in place to develop our technology," he says. "Our current objective is to develop a competitive system for the production of offshore associated gas capable of generating 2000bbls/day of product." But that, he emphasises, is only part of the plan. "We are also looking to adapt the technology for onshore use, to make it economically feasible to capture the energy from stranded gas and associated gas onshore."

Small and beautiful

Devices using microchannel technology are characterised by parallel arrays of microchannels with typical dimensions on the 0.1-5.0mm range. The small size of the channels reduces the heat and mass transfer distances, thus accelerating process productivity by 10 to 1000 fold.

The application of microchannel reactors is being explored by a number of companies for applications ranging from heat exchangers, to lab-on-a-chip production of very small volume chemicals, and the production of active pharmaceutical ingredients (APIs) and fine chemicals. In addition, the use of microchannel reactors for a range of reactions used to produce bulk chemicals is being developed by both Velocys and Evonik/Uhde. Velocys is also exploring the use of microchannel technology for distillation.

The enhanced heat transfer properties offered by microchannel reactors make this technology ideally suited for carrying out catalytic reactions that are either highly endothermic (such as SMR) or highly exothermic (such as FT), where heat must be efficiently transferred across reactor walls to maintain an optimal and uniform temperature to achieve the highest catalytic activity and the longest catalyst life.

How it works

In SMR the methane gas is mixed with steam and passed over a catalyst to produce a syngas consisting of hydrogen (H2) and carbon monoxide (CO) via the endothermic (heat requiring) reaction:

CH4 + H2O <-> CO + 3H2

in a high temperature (700-1100°C) catalytic process. SMR is used to produce more than 90 percent of the hydrogen used in the industrial market. The necessary heat input can be generated by the combustion of the excess H2.

The Fischer-Tropsch (FT) process was developed in Germany in the early part of the last century as a way to produce liquid fuels, such as diesel, from coal. In the FT process, syngas is converted into paraffinic hydrocarbons over a cobalt- or iron-based catalyst, via the highly exothermic (heat generating) reaction:

nCO+ (2n+1)H2-> CnH2n+2 + H2O

The FT process can be used to produce products such as diesel, naphtha and bases for synthetic lubricants, which are of higher quality than those derived by conventional means.

(1) See: and - Derek Atkinson is Business Development Director with Oxford Catalysts, Oxford, UK.

Jeff McDaniel is Business Development Director, Velocys, Plain City, Ohio, USA.

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