Gas Technologies

7/30/2019 Gas Technologies

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Gas Reserves and Technologies

1


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Reserves

2

0

200

400

600

800

1000

1200

1400

1600

Russia Iran Qatar Turkmenistan Saudi Arabia US UAE Nigeria Venuzuela Algeria

Trillioncubicmetre

s

Top 10 Global Gas Reserves, 2009


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Global Producers

3

0

5

10

15

20

25

US Russia Canada Iran Norway Qatar China Algeria Saudi Arabia Indonesia

%0fworldtotal(tcm)

Top 10 Producesrs in 2009


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World Natural Gas Consumption

Natural gas is rapidly becoming the premiersource of energy.

World Natural gas Consumption

2003: 90 Tcf

2020: 153 Tcf( EIA, International energy outlook, 2003)

Demand in electricity generation for natural gas

as fuel is set to increase by 80% from 5.23Tcf/year in 2002 to 9.39 Tcf/year in 2020 in justthe United States.


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Drivers

Power generation

Using Coal as fuel: $84/MWHr

Using natural gas: $41/MWHr

Other energy sources( nuclear and hydroelectric) about14% of the market but with considerable restrictions.Solarand wind are insignificant contributors and will continue to be so.

Natural gas in Transportation and a Source for

Hydrogen (When and how?)


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The New Energy Economy

Wood (1800s)

Coal

Oil

Natural Gas

Hydrogen (envisioned)

The emerginghydrogen economybetter characterized as a

fuel cell economythat will run on natural gas--i.e. a natural

gas economy

Increasingly:

Clean

Energy intensive

Technologicallysophisticated

Distributed

Carbon

content:

High

Medium

Low

(Zero)


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2005 by Institute for Energy, Law & Enterprise, University of Houston Law Center. All rights

reserved. 7

What is CNG, LNG, NGLs, LPG, and GTL?

LNG Composition

Others

5%Methane

95%

NGL Composition

Ethane,

propane,

butane

95%

Others

5%

LPG Composition

Propane

and Butane95%

Others

5%

Typical Natural Gas Composition

Methane

82%

Other

19%

Ethane

Nitrogen

Pentane

Butane

Propane

Carbon

Dioxide


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Reservoir Fluid Gases

Wet GasGas in Reservoir But Liquid and Gas

on Surface

Separating Conditions are in Fluid

Two-Phase Region

Dry Gas

Gas in Reservoir and Gas on

Surface

Both Reservoir and Separating

Conditions are in Fluid Single (Gas)

Phase Region.

Natural Gas

Principally Methane

Mainly Used as Fuel

Occasionally Has Liquefiable

Components (Condensate or Natural

Gas Liquid; NGL)

NGL on Fractionation Produces

Ethane

Propane

Liquified Petroleum Gas(LPG,

C3/C4Mix)

n-Butane

I-Butane

Natural Gasoline(C5+)Liquefied Natural Gas

Natural Gas Liquefied for

Purpose of Transportation


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0100200300400

500600700

0.45.9

47.317.4

28.9

%Share

QuadrillionBtu

Nuclear

38.9

21.626.15.96.5%

Share Coal

Hydro, Geothermal, Solar

24.46.37.0%

Share

22.1

25.9

%Share

153.58.1

47.5

0

600700

0.45.9

47.317.4

28.9

%Share%Share

38.9

21.626.15.96.5%

Share%

Share%

Share Coal


%Share%Share%Share

25.9

%Share%Share%Share

153.58.1

47.5

0

600700

0.45.9

47.317.4

28.9

%Share%Share

38.9

21.626.15.96.5%

Share%

Share%

Share Coal


6.8

%Share%Share%Share

25.9

%Share%Share%Share

153.58.1

47.5

0.45.9

47.317.4

28.9

%Share%Share

1970 1988-2001 2001 2010 20201970 2010 20201970 2010 202038.9

21.626.15.96.5%

Share%

Share%

Share%

Share Coal

38.7

23.7

7.0%

Share%Share%Share%Share

22.7

Oil

Gas

%Share%Share%Share%Share

153.58.1

47.5

%Share%Share

153.58.1

47.5

Forecast of World Energy Consumption


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Natural Gas Consumption and Production in the US


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0 2,000 4,000 6,000 8,000

MILES

$0.00

$1.00

$2.00

$3.00

$4.00

$/MMBTU

Figure 1

ILLUSTRATIVE COSTS (2002 PERSPECTIVE) OF

GAS AND OIL TRANSPORTATION

SHOWING GAS'S HIGHER COSTS AND THE EFFECT OF SCALE

(Gas Delivery Capability in BCM)

Crude Oil TankerOnshore

Crude Line

Two Train LNG (11)

42" HP Offshore

Gas Line (30)36" LP OffshoreGas Line (10)

56" LP Onshore

Gas Line (32)

36" LP Onshore

Gas Line

(10)

$/BBLOE

$20.00

$10.00

Jensen Associates


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12

ELEMENTS OF AN LNG DELIVERY SYSTEM

BASIS: TWO 4.0 MMT TRAINS - 6,100 NAUTICAL MILES

(ROUGHLY THE DISTANCE FROM NIGERIA TO THE U.S. GULF)REQUIRES ABOUT 12 TCF OF RESERVES TO SUPPORT

A 20 YEAR CONTRACT COST OF

CAPEX SERVICE

Field Development (Varies) $3.0 Bn $1.00

Liquefaction $4.3 Bn $2.15

Tankers (10 @$210 Mn) $2.1 Bn $1.23

Regasification (Varies) $1.1 Bn $0.70

Total $10.5 Bn $5.08


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2005 by Institute for Energy, Law & Enterprise, University of Houston Law Center.

Compressed Natural Gas (CNG)


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Scope of the CNG Technology

Projects using the CNG technology can be successfultechnically and commercially

CNG is capable of meeting small market demands

and monetizing small supply areas Majority of the investment involved with shipping

needs, thus, making the assets movable and used inother areas of interests

CNG can supply gas for distances of 2500 milescheaper than LNG


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Transport Costs

Supply Matched withDemand Centers

Smaller Demand

Centers can beconverted to gas

Transport costs range from

$1.25-1.75/MMBTU (100-300 MMSCF)


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Advantages

Simplicity

Inexpensive onshore facilities

Can start with very modest transporting needs Energy efficient

Can exploit isolated supply sources

Suitable for small demand markets

Compressed Natural Gas (CNG)

Source: Deshpande, A & Economides, M.J.

University of Houston


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reserved. 17

CNG Application

For distances up to 2500 miles, CNGappears more attractive than LNG

Major advantage in terms of market entry

Much less capital deployed in country

Up to 2 Bcf on a ship

Ideal for limited supply, limited consumingmarkets


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reserved. 18

Transportation of the gas

90% of the investment involved is in shipping of the gas.Loading and unloading is possible and easy with small

facilities.


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CNG Cargo Containment System


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What is Liquefied Natural Gas?

LNG is natural gas that has been super

cooled to minus 260 degrees F becoming

liquid for easier storage and shipping LNG is a clear, odorless, colorless, non-

corrosive and non-toxic liquid

LNG takes up 1/600th of the spacesimplifying storage and transportation


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LNG Fast Facts

An average LNG tanker carries 2.9 Bcf

The largest, a Q-Flex, carries 4.5 Bcf

LNG floats on water if spilled

There are 113 LNG facilities in the U.S.


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Composition

95% methane, 5% other heavier hydrocarbons


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5%

15%

100%

Over-RichWil l not bu rn

Flammable

Too Lean - Wil l not burnLower Flammability Limit (LFL)

Upper Flammability Limit (UFL)

5%

15%

100%

Over-RichWil l not bu rn

Flammable

Too Lean - Wil l not burnLower Flammability Limit (LFL)

Upper Flammability Limit (UFL)

Flammable Range for LNG (Methane)

LNG Properties

Density

3.9ppg (Water 8.3ppg)

LNG floats on water.

Flammability range

5 15%.


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Comparison of Propertiesof Liquid Fuels LNG LiquefiedPetroleum Gas(LPG)

Gasoline Fuel Oil

Toxic No No Yes YesCarcinogenic No No Yes YesFlammable Vapor Yes Yes Yes YesForm Vapor Clouds Yes Yes Yes NoAsphyxiant Yes, but in a vapor cloud Yes, same As LNG No NoExtreme Cold Temperature Yes Yes, if refrigerated No NoOther health hazards None None Eye irritant,

narcosis, nausea,

others.Same as

gasoline

Flash point

o

F -306 -156 -50 140Boiling point

oF -256 -44 90 400

Flammability Range in air % 5-15 2.1-9.5 1.3-6 N/AStored Pressure Atmospheric Pressurized

(atmospheric if

refrigerated)Atmospheric Atmospheric

Behavior if spilled Evaporates, forming visibleclouds. Portions of cloud

could be flammable or

explosive under certain

conditions.

Evaporates, forming

vapor clouds whichcould be flammable

or explosive under

certain conditions.

Evaporates, forms

flammable pool;environmental

clean up required.

Same as

gasoline

Source: Lewis, William W., Lewis, James P, Outtrim, Patricia A., PTL: LNG Facilities - The Real Risk, AiChE Meeting, New Orleans, April 2003 as modified by industry sources.


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LNG Production

Exploration

Liquefaction

Transportation

Regasification and Storage


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Brief History of LNGEMERGENCE

1941

First commercial LNG production 1964 Algeria first commercial LNG export facility Spawned all US receiving terminals and

several European counterparts 1969 Kenai USA starts supply to Japan 1970 Libya starts supply to Italy

DEVELOPMENT 1972-1990 Development of Far EasternLNG trade

Brunei, Indonesia, Abu Dhabi, Malaysia, Australiastart production

Korea, Taiwan, USA join Japan as importers

GROWTH

1996

Qatar starts production 1999 - Trinidad starts production 2000 Nigeria starts production

British Gas Canvey Island LNG Terminal

A World First Import Terminal


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General LNG Production Process

HeatExchangers

GasTreatment RefrigerantCompression

LNGShips

PipelineFeed Gas

-259 F

LNG Storage

Pentanes and heavier Condensates

Impurities-Carbon Dioxide-Mercury-Hydrogen Sulfide-Water-Nitrogen

Heat expelled towater or air

Source: Cheniere


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Liquefaction

Contaminants are removed to avoid damaging

equipments

Purify Natural Gas

Cooling to -260F


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Typical LNG Tanker

Holding tanks


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LNG Supply Chain


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Cross-Section of a Modern LNG Tank


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Transportation of Natural Gas

Pipelines vs Liquefied Natural Gas (LNG)

Pipelines are convenient and economical for onshoretransport of natural gas

Offshore, as the water depth and distance increasepipeline transport of gas becomes difficult.

LNG for offshore transport of gas.

LNG is liquid at260 oF and atmospheric presure,transported in specially designed ships.

25% of the trade movement of natural gas in 2002 wasas LNG. (BP Statistical Review, 2003)


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Typical cost components for LNG project

Liquefaction

50%

Shipping

39%

Unloading

11%


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Supply and Demand

Globally, receiving capacity exceeds liquefactioncapacity by almost 3 to 1

Japans receiving capacity alone exceeds total world

liquefaction capacity

Since much global LNG is spot traded, it moves where

the prices are highest


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Safety

Cleveland loss, 1944. 128 fatalities

Staten Island loss, 1973, 40 fatalities

Cove point loss, 1979, one fatality

Algerian loss, 2004, 27 fatalities

In the 50 year history of LNG marine shipping, there

has never been a significant loss. No LNG relatedfatalities. Over 80,000 voyages.


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Safety

Eight minor spills of LNG during ship loading or

unloading, no fires

Minor cryogenic cold fracture damage

Since a large spill has never occurred, and no largescale spill testing has been done, spills must bemodeled.

Significant variation in modeling output, so what dowe do?


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Why LNG Now?Growing Global LNG Demand

Pipeline

74%

LNG

26%

Source: BP Statistical Review of World Energy June 2003

Natural Gas Trade Movement2002

7% per year growth

(1992-2002)

Growth in LNG Demand

-

1,000

2,000

3,000

4,000

5,000

6,000

1970 1980 1990 1992 1994 1996 1998 2000 2002

bcf

Japan South Korea Taiwan France Spain USAItaly Belgium Turkey Greece Portugal UK

Source: Cedigaz, BP Statistical Review of Worl d Energy June 2003

LNG is about 6% of worldwide natural gas consumption and

about 94% of natural gas consumption in Japan.


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Global LNG Imports by Basin

In 2002 there are 43 terminals with acapacity of over 280 million tonnes, 24

of the terminals are in Japan.

Inter-regional LNG trade is expected to

increase six fold over the next 30 years.

Most of the increase in LNG trade wouldbe in the Atlantic basin, which will

overtake the pacific basin in volume.

Importing countries will need to add

almost 660 million tonnes of new

regasification capacity.

Global LNG IMPORTERSYear 2002

Japan

48%

South Korea

16%Taiwan

5%

France

8%

Spain8%Other

31%USA

5%Italy

4%

Turkey

4%

Belgium

2%

Greece

0%

Portugal

0%

Pacific Basin Atlantic Basin

Source: World Energy Investment Outlook, IEA, Nov. 2003.

Gl b l LNG I t


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Global LNG Imports

Japan 23

Importing CountryExistingPlanned

Japan 23Japan 24

Importing CountryExistingPlanned


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LNG Liquefaction FacilitiesThe LNG industry could be poised for dramatic growth

40

LNG supply growing Multiple LNG supply proposals

announced Long term LNG supply outlook

robust

Global LNG Supply

Source: Cedigaz, NPC

Existing

Under Construction

Proposed

LNG Li f ti F iliti


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LNG Liquefaction Facilities

More than 60%

of the equity isowned by state

companies; in

some cases in

joint ventures

with major oil

and gas

producers

1.4

2.0

2.0

2.2

2.6

3.0

3.0

3.4

3.4

3.8

4.4

4.6

4.7

4.7

8.9

9.1

10.0

17.0

23.3

0 5 10 15 20 25

BHP

Unocal

Mitsui

VicoNippon Oil Corporation (NOC)

BP

Nigeria National Petroleum Company

Omani State

Brunei Government

Abu Dhabi National Oil Company (ADNOC)

Total

Japan Indonesia LNG Company (JILCO)

Exxonmobil

Mitsibushi

Qatar Petroleum

Shell

Petronas

Pertamina

Sonatract

mpta

State

Owned

61%

Oil

Companies

23%

Others

16%

Liquefaction Capacity

Source EIA

G S


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Atlantic Basin LNG Supply and Demand

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Supply (2001) Demand (2001) Supply (2010) Demand (2010)

Bcf/yr

Middle East

Venezuela

Angola

Egypt

Trinidad

Nigeria

Algeria

New Markets

Europe

United States

Source: Pace Global Energy Services


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LNG costs are

declining.Natural gas can be

economically producedand delivered to the U.S.as LNG in a price range ofabout $2.50 -$3.50/MMBtu

depending largely onshipping cost.

LNG COSTS ARE DECLININGDoes not include feedstock prices

2.51.8

0.50.1

0.1

00.5

11.5

22.5

1980's Liquefaction Shipping Regasificationand Storage 2000's

$/MMBTU

Sources: El Paso

How Much Does LNG Cost?


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LNG Project Costs Will Continue Dropping

0

100

200

300

400

500

600

700

800

mid 1990 2002 2010 2030

$/tonneofc

apacity

Liquefaction Shipping Shipping Regasification and StorageSource : IEA


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Current LNG Cost Competitiveness

Source: Marcy Darsey et al, Liquefied Natural Gas,

Exploring Energy, Inc.s Future with a Developing Field,UH Law Center, 2004


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Liquefaction Costs Transformed

0

100

200

300

400

500

600

700

1990 1995 1999 Trinidad 00 Future LNG

$ per tonne of capacity

Source: BP


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Major Natural Gas Trade Movements

BP Statistical Review of World Energy 2004


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New Trade Routes Are Emerging

Existing Trade

Prospective Trade


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012345678

'95 '96 '97 '98 '99 '00 '01 '02 '03

LNG Spot Cargo - Volume

5 fold increasefrom 1998

Sources : Clarkson Research Studies, LNG Trade &Transport, 2003, BP

Volume of LNG Spot Cargo

MTPA

Spot Trading isincreasing rapidly

Source: Iwata, Makoto, Mitsui O.S.K. Lines,

Ltd., LNG Transportation, LNG MinisterialSummit Washin ton D.C. 2003

C i f i


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Comparison of gas prices

Case I: Transported Volume = 3.5 106 ft3

Case II: Transported Volume = 5.0 106 ft3

Price of gas: $0.75/MMBTU, Liquefaction: $1.0MMBTU,

Regasification: $0.4/MMBTU

Usage of water-cooled compressor raises the unit price of the gas by

0.01/MMBTU.

Distance LNG CNG (Case I) CNG (Case II)

miles $/MMBTU $/MMBTU $/MMBTU500 3.55 2.72 2.72

1000 3.65 2.74-2.84 2.82-2.90

1500 3.75 3.06-3.10 3.15-3.26

2000 3.85 3.30-3.37 3.11-3.62

2500 3.95 3.44-3.90 3.50-3.98

3500 4.25 4.08-4.43 3.98-4.34

5000 4.65 4.84-5.49 4.70-5.43


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Gas-To-Liquid

51


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GTL

GTL (Gas-to-liquids) technology converts natural

gas into hydrocarbon liquids.

Impetus for the GTL technology: Clean fuelobtained as product and easy transportation

Main products: Middle distillates like gasoline,

kerosene, jet fuel,naphtha and diesel


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Reasons for GTL attraction

Monetizing stranded natural gas Salvaging associated gas

Meeting environmental specifications

Maintaining pipeline productivity (e.g., Alaskapipeline)

Source: Economides, M.J. University of Houston


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GTL Technology


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Gas to Liquids

The Fischer-Tropsch synthesis (F-T synthesis) isone of the most important technologies for GTL.

A main advantage of the F-T products is the

absence of sulphur, nitrogen and complex cyclichydrocarbons resulting in almost no emissions ofsulfur dioxide, nitrous oxides and unburnedhydrocarbons.

For 100 barrels of liquids 1 MMscf of gas isneeded


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STAGE 1


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STAGE 1

Two processes may be used to convert methane into syngas:

Natural gas autothermal reforming (ATR).

Methane may be converted into syngas via a reaction with water (steam) and

oxygen O2 :

2CH4 + O2 + H2O 5H2 + 2CO OR

with water (steam) and carbon dioxide CO2:

2CH4 + O2 + CO2 3H2 + 3CO + H2O

Both of these reactions are exothermic (they produce heat), and the temperatureof the syngas produced is around 1000 OC.

Steam methane reforming (SMR).

Methane may also be converted into syngas using only water. It requires a high

temperature (700-1000 OC) and occurs in presence of a Nickel based catalyst.

CH4 + H2O CO + 3 H2 This is the most used method to convert methane into

syngas (widely used to produce ammonia-based fertilizers).


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STAGE 2

The syngas ('synthetic gas') obtained in the previous step contains

contaminants, which must be removed:

Solid particles are removed with cyclones, fabric filters, scrubbers.

Carbon dioxide CO2 and Sulfur compounds are removed with a process

called 'Gas sweetening' or Acid Gas removal.


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The process :

The idea is to flow the gas stream through a liquid solvent, in which the

contaminants will be absorbed. Then this solvent - loaded with contaminants - is'regenerated' by heating or cooling it down: the solvent releases the

contaminants. Then these contaminants can be processed appropriately.

Various solvents may be used.

The most commonly used in this process are:

MDEA (Methyldiethanolamine)

DEA (Diethanolamine)

MEA (Monoethanolamine)

These solvents are commonly named amines. Hence the name 'Amine gas

treating' that can also be used for this process.


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The clean syngas is liquefied in a Fischer Tropsch reactor.

The clean syngas is then introduced in a reactor in which it

undergoes a reaction in presence of a catalyst (Cobalt based).

This reaction is explained further in some details.

The Hydrogen and the Carbon monoxide from the syngas reactto form hydrocarbon chains. The type of hydrocarbons produced

depends mostly on the catalyst used and the temperature of the

reaction.

The Fischer Tropsch (FT) process


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The Fischer Tropsch (FT) process

is a chemical reaction between Carbon Monoxide CO and

Hydrogen H2, facilitated by a catalyst (usually Iron or Cobalt), and

which produces hydrocarbons (their type depends on the catalyst

used and the conditions at which the reaction occurs).The mix of CO and H2 used in this reaction is called syngas

and can be produced in various way, using various organic

materials (coal, natural gas, Biomass, Oil shales, solid residues

from refineries etc...).

The FT process was developed in Germany in the 1920s by

Franz Fischer and Hans Tropsch at the Kaiser Wilhelm Institute in

Berlin (Today Max Planck Institute).

It was first used on a commercial scale in 1936, and throughout

the 2nd World War permitted to produce 6.5 millions barrels ofsynthetic fuels, which allowed Germany to wage a war without

holding significant 'natural' oil reserves on its territory.

GTL projects: the birth of an industry


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GTL projects: the birth of an industry

SasolChevron

Nigeria

35kbpd

BP

Colombia Condor

~35kbpd

Sasol

Oryx35kbpd (70kd/d train 2)

ShellPearl

140kbpd (Nov. 2003)

ExxonMobil

AGC 21

160kbpd (July, 2004)

ConocoPhillips

SasolChevron

Marathon/Syntroleum

POSTPONED

Heritage Plants

Shell Bintulu

PetroSA Mossgas

Tinrhert

Algeria35kbpd

World GTL

Trinidad4kbpd

GTL Cost Trends


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GTL Cost Trends

0

20

40

60

80

100

000$

/tonneInstalledC

apacity

Mossgas

1991Bintulu

1993

Oryx

2006

Escravos

2009

Pearl

2010

Actual Estimated

Relatively few commercial-scale projects to date Significant scope, scale and location-specific differences

Estimates based on published data

LNG and GTL comparison: boundary


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p y

conditions

GTL Plant

Documents

Gas Technologies