Wednesday, June 29, 2011
Shale Gas - Short Carbon Chains to Long Carbon Chains
Welcome to the Collaborative Revolution!
The most intriguing thing to me about the shale gas boom is the potential to "refine" natural gas - a short chain hydrocarbon - into a variety of long chain hydrocarbon products. I've long argued for the use of renewable energy resources on the grounds that we REALLY need to preserve our oil and gas resources until we unlock the secrets of the vast energy reserves. Advances in nanotechnologies always stuck me as the most likely mechanism for doing so. While nanotechnology may ultimately carry the day old fashioned refining techniques - reversed and applied to natural gas - may well preempt much of the hand wringing over "peak oil" that has dominated the conversations related to sustainability for the last several decades.
Shell has opened two massive refinerie that feature what I call "reverse refining" processes. In the energy industry the process is called gast to liquid or a GTL process. The Pearl Plant in Qatar and the Bintulu Plant in Malasia both utulize the technique to convert natrual gas feed stock into liquid fuels, paraffin and other refined petroleum products with higher profit margins and more specialized uses than raw natural gas.
The Shell Pearl Plant, planned, designed, constructed operated and maintained purusant to a fully intergrated joint ventrue agreement between Shell and Qatar took almost 7 years to construct. 54,0000 employees worked 77 million hours constructing the plant without a single serious accident! Shell has a wealth of information about the plant on the web, You can follow the Shell Pearl Plant link and peruse the website at your leisure. The image below is an aerial view of construction in 2010.
Shell's Bintulu GLT Plant, like the Pearl Plant, is a join venture. For an excellent report summarizing the scope and nature of the Bintulu GLT Plant take a look at Robert Rapier's excellent article in Consumer Energy Report titled Inside Shell's Bintulu GTL Plant. As Robert notes in the excerpt below, the joint venture was a great success.
The plant is actually a venture composed of four shareholders: Shell (72%), Mitsubishi (14%), Petronas, the national oil company of Malaysia (7%), and Sarawak State (7%).
The plant was originally completed in 1993 with a capacity of 12,500 bbl/day at a cost of $850 million. That is a capital cost of $68,000 per daily barrel, more expensive than a conventional oil refinery but far less than the costs often cited for coal-to-liquids (CTL), biomass-to-liquids (BTL), or any number of alternative fuel technologies. The plant has since expanded to the present capacity of 14,700 bbl/day and the total investment is over $1 billion.
While Shell is scaling these processes up - and gaining economies of scale - my thought is the right integrated team can scale the system down and add real value in key regions impacted by shale gas plays. I expand a bit on these thoughts in Collaborative Construction's June Newsletter and will revist the idea in a future post here.
James L. Salmon, Esq.
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Cincinnati, Ohio 45202
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