BP predicts late winter startup

GTL plant nears completion

Posted: Friday, November 16, 2001

The gas-to-liquid demonstration plant British Petroleum is building in Nikiski is about 82 percent done, and it's expected to start producing in February or March, says Steve Fortune, engineering manager for the project.

He briefed members of the Alaska Support Industry Alliance Kenai Chapter during lunch at Paradisos Restaurant in Kenai Tuesday.

"We are very close to finishing, and we are very excited," Fortune said.

Fortune has been on BP's GTL test team for five years, trying to develop a process where World War II technology can be made efficient enough to work commercially.

A gas-to-liquid plant takes natural gas and turns it into synthetic fuels through a three-step process. The first step is breaking down the gas in a "compact reformer" that takes methane and water and converts them to carbon monoxide and hydrogen, or syngas.

BP has developed a compact reformer that is 1/40th the size of conventional ones. That will reduce costs in construction and transportation to the North Slope.

"Sixty percent of the cost is in the first step, so if we can bring that price down, it will impact the whole project," Fortune said.

Step two takes the syngas, through a technology developed by two German chemists in World War II called the Fischer-Tropsch process, and turns it into a long molecular-chain paraffin, which Fortune said would look a lot like candle wax if allowed to harden. The World War II version of the process was only 20 to 30 percent efficient.

BP, with its partner Kvaerner, has developed a new catalyst for the Fischer-Tropsch process, which is boosting its efficiency to 65 percent and beyond.

The third step is hydrocracking, breaking down the long-chain paraffin into short molecular-chain fuels such as diesel, jet fuel and naphtha.

"The gas is much cleaner, and we will derive fuels that are much cleaner from it," Fortune said.

The diesel and jet fuels will contain no sulfur or nitrogen oxides or aromatics. The naphtha also will have low levels of aromatics.

"All of this gives you an idea why BP wants to move in this direction, but there are some barriers," he said.

The main one is cost. Bringing down the cost of the GTL process means boosting its efficiency. Most syngas processes are 60 percent efficient, while the Nikiski plant is planned to be 65 percent efficient. That means 65 percent of the carbon as gas that goes into the plant comes out as product. Fortune said a commercial plant standing alone needs to reach 75 percent efficiency.

But the plant can take advantage of "synergies," to boost the effective efficiency, Fortune said.

The GTL process creates excess hydrogen, which could be put back into fueling the process, or used as a vehicle fuel.

"As BP looks to the future of a hydrogen economy, it is the cleanest burning fuel and can be used in fuel cells or for much more environmentally friendly transportation," Fortune said.

Ammonia is created, which could be used in fertilizer plants to make urea, while methanol can be used as chemical feed stock in making plastics. And the steam created by cooling can be used to generate electricity.

Combined, it could mean 80 to 85 percent efficiency.

The pilot plant in Nikiski will take 3 million cubic feet of natural gas and convert it into 300 barrels of product per day. BP has a contract to sell its product to the nearby Tesoro refinery.

A full-scale commercial version of the GTL plant would produce 100 times as much product.

Fortune said if a natural gas line from the North Slope ever terminates in Cook Inlet, there is enough land around BP's plant to expand the GTL plant, though the company does not own it. At present, the $86 million plant has a projected five-year lifespan.

"We need to run it for a year or two years to get a handle on the technology," he said.

The Nikiski plant is designed to allow new technology to be "plugged into it" for demonstration and evaluation in the future.

Fortune said plant construction peaked at 220 employees in October. He said 80 percent were local or Alaska hire. Construction began in February.

When it is operating, the plant will have a staff of 20.

He said $40 million of the price tag of the plant will be spent in Alaska.

BP can use the GTL process either to convert North Slope natural gas to syngas on the North Slope, and pump it down the trans-Alaska oil pipeline, either combined with North Slope crude, or separately. If a natural gas line comes to Alaska tidewater, a GTL plant could be used there to do the conversion and export the product in tankers to West Coast refineries.

Fortune said the plant needs natural gas at or below 50 cents per thousand cubic feet, which means it would be unlikely such a plant would be built very far away from the source, such as the Lower 48, as tariffs add considerably to the price.

Fortune said Shell and Exxon also are working on their own versions of GTL, which are slightly different. They use oxygen rather than water in the first step, he said.

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