There has been much attention and investment in the oil and gas industry in the area of carbon capture and sequestration, but we hear much less about creating value from recovered off-gas – quite simply, money and CO2 that is disappearing into flares from petrochemical plants and refineries throughout the Middle East.
While many plant operators in the region have made enormous strides in flare reduction, converting remaining flared gas into methanol or gasoline can have both economic and environmental returns.
There’s been a significantly greater call to reduce gas flaring and CO2 venting since the United Nations’ 21st COP climate negotiations took place last year, resulting in increased pressure on the refining and chemical industries to cut their greenhouse gas (GHG) emissions. For example, since the summit, our company has taken inquiries from the Gulf region in particular, where innovative operators at refineries and petrochemical plants are looking for ways to reduce the flaring of their off-gas streams.
We believe that the optimal solution lies in gas-to-liquids (GTL) technologies, which can transform off gas streams, which would otherwise be flared, and CO2 streams that are often vented, into valuable liquid transportation fuels and chemicals, including high-quality gasoline or methanol.
The most well-known GTL technology is Fischer-Tropsch (FT), which is used at very large gas fields, such as Qatar’s massive North Field, to transform natural gas into a slate of end products including diesel and lubricants. But the enormous capital investment required – Shell’s Pearl plant in Qatar cost about $20bn, for instance – makes FT uneconomical for anything but the largest gas fields.
However, there are alternative GTL technologies available that are optimised for small-scale integration within refineries and chemical plants to significantly reduce flaring and venting while allowing for environmental and economic returns. For example, our company took the approach of building modular GTL systems with minimal utility requirements that can be fully met by existing onsite electricity and cooling water systems, keeping the total project cost low. They are built offsite at a fabrication facility and then transported to the refinery or chemical plant site, where they are assembled and then commissioned, keeping construction time and onsite labor costs down by comparison with the traditional stick-built approach. Once in operation, the GTL systems produce high-quality gasoline or methanol from off-gas streams, while also producing a separate stream of hydrogen-rich vent gas that can be used as an additional onsite hydrogen or fuel source.
In a refinery setting, the gasoline represents a unique and valuable addition to the refinery’s blending pool because the production cost is independent from the price of crude oil and the sulfur content is nil. Methanol can be used onsite in many cases, or sold to local methanol users who benefit from reduced transportation costs compared to methanol sourced from distant mega-plants. In addition, greenhouse gas emissions can be further reduced with GTL systems through the input of CO2 streams. Our systems, for example, accept up to 25% CO2 as co-feed which is converted into gasoline or methanol, representing a valuable use for what is typically considered a low-value or even negative-value gas stream.
While we have seen large GTL facilities face hurdles over the last few years, from halting projects to even abandoning them, we recognise the enormous opportunity for small-scale GTL projects to accelerate, even with the narrowing of the difference in oil and gas prices. This is especially true in locations where small-scale GTL plants can be “plug-and-played” at sites where they can utilise the existing infrastructure.
The bottom line is that GTL technologies are an ideal solution for reducing gas flaring and CO2 venting while boosting returns, but it’s only prudent for refineries and chemical facilities to pursue projects that utilise the most efficient GTL technologies available for use in small-scale applications.