GTL plant up and running New technology now producing about 100 barrels a day

Posted: Wednesday, August 06, 2003

After a long startup and a series of technical hiccups, BP Exploration (Alaska) Inc.'s new gas-to-liquids test facility in Nikiski is now fully operational.

The first barrels of synthetic crude oil made from natural gas were produced July 27 and by last Friday the plant was producing about 100 barrels per day. BP plans to produce about 250 barrels per day of the product in a test program that is planned to last six to 12 months, though there is no firm target, according to David MacDowell, a spokesperson for BP.

"This is great news," Kenai Peninsula Borough Mayor Dale Bagley said. "We're pleased BP chose Nikiski as the site of this experimental plant, and that the company has been successful in developing its new technology.

"The Kenai Peninsula has a vested interest in attracting new technologies that create new ways of using our natural resources," Bagley said.

Gas-to-liquids technology at the Nikiski demonstration plant is used to convert methane gas into high-quality, clean-burning synthetic crude oil, MacDowell said.

"Successful demonstration of our new technologies will offer significant improvements in the commercial viability of the GTL process," he said.

BP and Davy Process Technology developed the process being tested at the plant.

Many companies around the world are working on different GTL technologies. While the process is primarily intended for use with "stranded" gas reserves that cannot be marketed with a conventional pipeline, it also makes liquid fuel products that are cleaner burning than conventional fuels because GTL products have no sulfur or aromatics, the chemicals in conventional fuels that produce soot.

Construction on the $86 million test plant was completed in May 2002. BP had planned an extended and gradual startup because the focus was on learning and testing the two proprietary new technologies involved.

"This is a test plant, but it's also more like starting up a chemical plant than an oil and gas processing facility, which Alaskans are used to," MacDowell said.

However, it ended up taking more than a year to get the plant operating because of a variety of challenges some expected and some unexpected.

"We learned a lot through all of this, which is the point of having a test plant," MacDowell said.

Ironically, many of the problems were not associated with the new technologies, but with conventional systems in the plant, he said.

One recent problem involved a seal in a compressor unit which had to be redesigned, according to Len Seymour, BP's manager on the project.

This required the compressor being taken out of the plant and flown to the manufacturer in California, and then being returned to Nikiski, Seymour said.

MacDowell said it is likely the plant operators will take the Nikiski test facility through several shutdowns and startups as a part of the test program.

The new technologies being tested include a new compact reformer that, if successful, could substantially decrease the costs of building gas-to-liquids plants and an improved Fischer-Tropsch gas conversion unit that produces a hydrocarbon wax that is then converted into liquid synthetic crude oil.

GTL plants have three stages. BP and Davy Process Technology are aiming to improve two of them.

The first stage involves a reformer which converts methane, or natural gas, into a "synthesis gas" which is then fed into the second stage, the Fischer-Tropsch conversion unit.

The third stage is a conventional hydrocracker unit, similar to those in many refineries, which make a liquid product from hydrocarbon wax that comes from the Fischer-Tropsch converter.

In GTL plants that exist today, the front-end reformer is the most expensive part of the plant, often amounting to 60 percent of the total plant cost. BP's new design involves a reformer that is smaller, more compact and potentially less expensive.

MacDowell said the new GTL technologies being tested could be used in developing "stranded" natural gas reserves anywhere in the world.

Although the technology could be used with North Slope gas, BP's preference for its Alaska gas is a conventional natural gas pipeline from Alaska to the Lower 48, MacDowell said.

Tim Bradner is a reporter for the Oil & Gas Reporter and the Alaska Journal of Commerce.

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