KENAI (AP) -- The gas-to-liquids demonstration plant British Petroleum is building in Nikiski is expected to start producing in February or March, according to Steve Fortune, engineering manager for the $86 million project.
''We are very close to finishing, and we are very excited,'' said Fortune, who has worked on BP's GTL team for five years.
A gas-to-liquid plant takes natural gas and turns it into liquid fuels that can be transported more easily.
The first step is breaking down the gas in a ''reformer'' that converts natural gas and water to carbon monoxide and hydrogen.
BP has developed a compact reformer that is 1/40th the size of conventional ones.
''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 carbon monoxide and hydrogen and turns that mix into a kind of paraffin, which Fortune said would look a lot like candle wax if allowed to harden.
The third step breaks down the molecular chain of the paraffin so it can be turned into liquids such as diesel and jet fuel. The fuels produced by this method contain no polluting sulfur or nitrogen oxides.
''All of this gives you an idea why BP wants to move in this direction, but there are some barriers,'' Fortune said.
The main barrier is cost. Bringing down the cost of the GTL process means boosting efficiency. Similar plants elsewhere have been roughly 60 percent efficient, while the Nikiski plant is projected to be 65 percent efficient.
But Fortune said a commercial plant standing alone needs to reach 75 percent efficiency. Waste heat and excess hydrogen can be used to generate electric power, however, and other byproducts can be used in fertilizer or plastics. Combined, that could boost efficiency to 80 or 85 percent.
The pilot plant in Nikiski will take 3 million cubic feet of natural gas and convert it into 300 barrels of product daily. BP will sell the liquid to the nearby Tesoro refinery.
A full-scale commercial version of the GTL plant would produce 100 times as much.
The Nikiski facility has a projected five-year lifespan, and it's designed so that new technology can be plugged in for future testing.
''We need to run it for a year or two years to get a handle on the technology,'' he said.
Construction employment for the project peaked at 220 employees in October. When it is operating, the plant will have a staff of 20.
BP could use the GTL process on the North Slope to turn natural gas into a liquid that could be pumped down the trans-Alaska oil pipeline.
Fortune said the process needs natural gas at or below 50 cents per thousand cubic feet to be feasible. That means it would have to be near a source of gas that can't be sold on the open market, where the fuel brings several times that amount.
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