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Gas-to-Liquids (GTL)

Discussions of conventional and alternative energy production technologies.

Re: Gas-to-Liquids (GTL)

Unread postby lpetrich » Thu 28 Jun 2018, 02:30:44

Tanada wrote:
NEW ORLEANS (AP) — Low oil prices and a volatile market are prompting a South African energy and chemical company to drop plans for an $11 billion to $14 billion U.S. plant to convert natural gas to liquid fuels and to pull out of Canadian shale. ....

LINK

From this and the rest of this thread, it seems like GTL for liquid fuels is only borderline economically viable -- its viability is very sensitive to the relative prices of natural gas and crude oil.

However, GTL for specialty hydrocarbons like motor oil seems to be thriving. I think that it is more successful there because (1) one needs much less lubricant than fuel and (2) GTL lube has demonstrably superior performance. This makes a price premium much more tolerable.

I hope that I have gotten the economics straight.
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Re: Gas-to-Liquids (GTL)

Unread postby Tanada » Thu 20 Sep 2018, 12:31:11

Representatives of Extiel-Advantage Somerset, the GTL (gas to liquid) plant that will locate in Somerset, were in town Tuesday and Wednesday looking at some additional properties the plant will need in the future, Somerset Mayor Eddie Girdler reported. The GTL plant will be built off Thoroughbred Drive near Somerset Rail Park on a 23-acre site that was formerly Crane Company property.

Houston-based Extiel CPG, LLC, the firm that will build and operate the plant, has established an office in Somerset Energy Center, but apparently no actual work has started at proposed plant site. Greg Carr, managing director for Houston-based Extiel CPG, LLC, told the Commonwealth Journal much of the plant’s physical structure will be manufactured in Houston and shipped by truck to Somerset. Construction will begin late this year and operations will start in 2020, according to an Extiel press release.

Extiel-Advantage Somerset is a unique (GTL) gas-to-liquid plant that converts low-cost natural gas into high-value, full-synthetic waxes, base oil and solvents. The proposed plant will be a down-sized version of a large-scale GTL plant design and will produce 250 barrels per day of ultra-clean synthetic fuel products, waxes and industrial hydrogen.


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Re: Gas-to-Liquids (GTL)

Unread postby ROCKMAN » Fri 21 Sep 2018, 15:16:18

Odd to see this little plant built in KY, not known for much NG production. But that may be the reason: very cheap NG with very limited access to bigger markets. That was the case years ago when I drilled in KY: lots of stranded NG. Otherwise why not build in south Texas or at the Henry Hub? At 250 bbls per day it will have zero impact on the US oil and NG market.
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Re: Gas-to-Liquids (GTL)

Unread postby Carnot » Tue 25 Sep 2018, 09:53:53

Bonsai plant with no hope of being economic.

The products from GTL are limited and expensive. They can make good quality jet ( must be used as a blend) and diesel. GTL gasoline is low octane. The market for lubricants and waxes is limited and dominated the the main players (Shell/ Exxon). Lubricant technology is moving towards PAO's and esters rather than isoparaffins.

This plant will produce about 32 kta which would not bring in enough revenue to feed a mouse, let alone sustain all the staff, costs and operating expenses that will be required to operate and maintain this type of plant.

I would not have got past the first stage of economic assessment - it is simply too small. Even the Chinese do not build GTL and they are suckers for anything.
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Re: Gas-to-Liquids (GTL)

Unread postby ROCKMAN » Wed 26 Sep 2018, 11:09:47

Carnot - Yeah but if you were a very small public company with a P/E ratio of NEGATIVE 35 and a return on invested capital of NEGATIVE 0.9% you would glad have any free advertising of your press release as this has spurred. LOL.
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Re: Gas-to-Liquids (GTL)

Unread postby Carnot » Thu 27 Sep 2018, 04:11:28

Rockman, I could not agree more. You ably put a similar comment in another earlier topic. When faced with unemployment when the funds dry up it is amazing how supposedly learned people will stretch the truth to sucker in more gullible investors. No parallels with shale of course, which does, at the moment, seem to be making some money for a few in spite of the ferocious production decline rates.
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Re: Gas-to-Liquids (GTL)

Unread postby ROCKMAN » Fri 28 Sep 2018, 14:19:49

Carnot - What many fail to appreciate (but I suspect you do) is that if a pubco knew for certain that their shale wells were going to make zero profit (neither make money nor lose it) they would still drill those wells. The key metric Wall Street values a petroleum pubco is adding proved reserves to its books y-o-y even if those new wells generate no profit. Given expenditures and revenue are stretched out over many years it is very difficult even for insiders to measure a companies profitability. And the SEC has no chance of calculating it. But with reserve reports generated by independent third party engineering companies it's butt simple to show y-o-y increases in proven reserves. Even if the company is making zero profit doing so.
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Re: Gas-to-Liquids (GTL)

Unread postby ROCKMAN » Fri 28 Sep 2018, 14:43:08

Hell, Carnot. I just remembered one of my favorite stories. In the early 1990's I drilled horizontal wells into slowly producing conventional reservoirs in La. state waters. Did not increases proved reserves at all: just recovered the faster given the high flow rates of my hz wells. Overall increased company production from 10 million cubic feet per day to 50 million cf/d.

Hw did Wall Street respond: increased the stock price from $0.75/share to $5.00/share. And if you carefully read the fine print of our annual SEC filing we actually lost money on the wells: the total well cost was greater then the increase in net present value of the production. Even fooled a very famous Wall Street raider who subsequently succeeded in a hostile take over of the company. He didn't realize the real value of the company was the small group of professionals working there. All of who left the company after he took over. Ina few years the company filed bankruptcy, was liquidated and disappeared forever.

That history is a big part of the reason I decided to finish my career with a private company and not a public one. All my owner cared about was us making him money. Life was much more simple. LOL.
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Re: Gas-to-Liquids (GTL)

Unread postby Tanada » Sat 31 Dec 2022, 17:27:58

Bechtel Tapped to Design Natural Gas-to-Gasoline Plant in Texas



Energy developer Nacero Inc. has tapped global engineering and construction contractor Bechtel to design a $6.5 billion to $7 billion plant the firm plans to build in the Permian Basin — a facility Nacero says would be the nation’s first natural-gas-to-gasoline manufacturing facility.

Nacero on May 25 awarded a front-end engineering and design (FEED) contract to Bechtel for the 115,000-barrel-per-day facility, which project officials say will incorporate carbon capture, sequestration and 100% renewable power.

The Odessa Development Corp. and Houston-based Nacero on April 22 announced plans to build the plant in Penwell, Texas, just outside of Odessa.

“This project is truly a game changer,” said Bechtel Energy president Paul Marsden in a release. 

"Decarbonization is a key to our energy transition here in the U.S. and around the world,” Bechtel Energy president Paul Marsden said in a statement to ENR. "Nacero and their pioneering approach to lower-carbon gasoline are a great fit for these ambitions. Efforts like this also empower everyday people to contribute to the energy transition towards net zero. It is really powerful.”

Once Bechtel completes the FEED contract, it will deliver a lump-sum price proposal for engineering, procurement and construction. Project officials say Bechtel will employ sustainable design practices and work toward reducing the project’s carbon footprint, both in the supply chain and during construction.

“For America to achieve its domestic energy and climate change mitigation goals, we need big vision and laser-focused execution. Bechtel is center stage in helping us get there,” Nacero president and CEO Jay McKenna said in a release.

At its peak, construction of the four-year first phase is expected to employ 3,500 skilled construction workers on site and would produce 70,000 barrels-per-day of gasoline component, ready for blending. The second phase is expected to take two more years and will increase capacity to 100,000 barrels per day.

When fully operational, the plant will employ 350 full-time operators and maintenance personnel.

Made from a combination of natural gas, captured bio-methane and mitigated flare gas, the gasoline produced at the facility will not contain sulfur and will have half the lifecycle carbon footprint of traditional gasoline, according to the company.

Most of plant’s electricity will come from energy produced by solar panels on the 2,600-acre site.


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Re: Gas-to-Liquids (GTL)

Unread postby Outcast_Searcher » Sun 01 Jan 2023, 19:12:41

ROCKMAN wrote:Hell, Carnot. I just remembered one of my favorite stories. In the early 1990's I drilled horizontal wells into slowly producing conventional reservoirs in La. state waters. Did not increases proved reserves at all: just recovered the faster given the high flow rates of my hz wells. Overall increased company production from 10 million cubic feet per day to 50 million cf/d.

Hw did Wall Street respond: increased the stock price from $0.75/share to $5.00/share. And if you carefully read the fine print of our annual SEC filing we actually lost money on the wells: the total well cost was greater then the increase in net present value of the production.

Wall Sreet very often follows short term earnings trends (to the exclusion of LOTS of other important things) when valuing stock prices in the short term. Stupid, but true.

The problem is, reality and future forecasting being complex, it can be difficult to tell which prices are rational and which aren't. Generally you need to be an expert in the area being considered AND lucky enough not to get smacked by something (like new tech, geopolitics, etc) out of the blue to take advantage.

In my 40 years of investing, I've managed to do that a few times, but given the risk, only risked small amounts of capital in the ideas. (And my time of likely understanding small public software firms' primary product better than the market and the (supposed) analysts is WELL past).
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Gas-to-Liquids (GTL)

Unread postby ROCKMAN » Tue 10 Jan 2023, 16:30:48

Outcast: thru out my career every well-run company used roughly the same stat to determine viability of increasing production by whatever means: 5-year payout or less using constant current value. Stock hustling company might go 10+ years or use ridiculously escalated product prices. And sometimes both. Sadly, the hype would work...for a few years. The trick was selling my stock before the bubble would burst. Easy enough for the insiders to do. Same plan: in early/out early.
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