Executive Q&A viewpoint

Doug Miller, Vice President and Manager of Oil and Gas, Black & Veatch

In today’s low-oil-price environment, energy operating and service companies are finding synergies in mergers and acquisitions to create added value and to reduce costs. The same holds true for natural gas-focused companies.

Whether gas is developed as associated gas from oil wells, produced from gas and condensate wells, or discovered as stranded gas in remote or harsh environments, the best way to optimize the value of gas is to move it to consumers in a high-demand form. In many regions around the world, that form is liquid fuels. As a historical leader in GTL technology, Black & Veatch (B&V) is ramping up its capabilities to serve this growing market.

In the fourth quarter of 2014, B&V and Emerging Fuels Technology (EFT) joined forces to improve the speed-to-market, cost-effectiveness and reliable pathways to implement GTL projects. The agreement covers projects that use a variety of feedstocks, including natural gas, municipal solid waste, biomass and coal, which are often collectively referred to as XTL.

Under one aspect of the agreement, B&V will apply its expertise in EPC project execution, as well as in modular and skid-mounted design and standardization, to develop and implement packaged designs for small-scale GTL and XTL plants with design sizes ranging from 500 bpd to 10 Mbpd. The packaged designs, which use shop-fabricated modules that can be shipped by truck, result in reduced project costs and timelines.

Gas Processing spoke with B&V’s vice president and manager of oil and gas, Doug Miller, about the state of the industry and what lies ahead for GTL technology.

GP. How long has B&V been designing GTL systems?

Miller. B&V began participating in GTL plant designs in the early 1990s. The company has professionals with project experience dating back to the 1980s. Our experienced professionals have been instrumental in working with catalyst and technology suppliers, such as EFT, which has a proven, licensed technology and a patented catalyst for producing GTL products from syngas.

As a team, B&V and EFT are creating and developing GTL solutions for the industry and maximizing the strengths of each organization. As part of this continued emphasis on growth plans for the GTL industry, and with responsibilities as part of the B&V oil and gas business line, B&V and EFT are involved daily in the development and advancement of GTL technology and are excited about the future potential for the industry.

Through our extensive EPC capabilities on a global scale, B&V is able to provide a complete solution for our clients. Our GTL process knowledge, coupled with our EPC project execution, allows B&V to participate from early feasibility studies through detailed engineering, commissioning, startup and performance testing of facilities.

GP. How has GTL plant design and technology evolved over time?

Miller. Companies are continuously searching for means to find solutions that address cost, scheduling and attractive economics. Technology companies like EFT continue to address more capital-efficient process designs, catalyst productivity, catalyst life and the ability to produce high yields at favorable conditions.

Engineering companies often look for ways to package equipment in skids and to standardize, where feasible, to make repeatable designs for future units to reduce overall plant cost and scheduling. Looking at this from an industry perspective, GTL has continued to spark interest as companies and environmental demands evolve to reduce emissions from oil and gas operations.

Also, flared gas regulations are driving demand for capture, and GTL is a potential solution. Cleaner transportation fuels generated from Fischer-Tropsch (FT) synthesis of syngas are becoming an environmentally desirable way to reduce fuel burn emissions.

Furthermore, engines are benefitting from performance improvements, as well as from the use of synthetic lubricants generated from synthetic crude oil.

GP. How has the EPC of modular GTL facilities changed over time?

Miller. The evolution of the technology, and the approach to streamlined costs and schedules for facilities, have resulted in a greater demand to find skid-packaging and modular-construction solutions.

Several factors drive the increase in the desire to skid and modularize. These factors include providing construction in remote locations, where resources and site-specific issues make construction more difficult and costly. Also, the industry has experienced times when construction resources were constrained. The use of skids or modules in such a situation helps reduce field hours for construction.

Additionally, the use of skids and modules has increased to accommodate the concept of offshore applications, where placing modules on a floating unit is desirable. Developing skids and standardizing on sizes also aids in repeatability and flexibility to deliver a product to market faster. Addressing schedule constraints for companies is also a trend in the industry.

GP. What type of catalysts for GTL technology are the most economical?

Miller. GTL catalysts for FT reactions are generally active metals, such as iron or cobalt, with promoters, such as noble metals or oxides. These GTL catalysts are generally found with various supports, such as alumina, silica or titanium.

Economics are a function of project drivers and decisions that the end users must factor into their determination for selection. One selection might be less expensive than another, yet may not provide the same productivity or yields and may be less active.

To assess the economics for catalyst choices, it is important to be aware of the overall project economics and drivers for selection. For example, the EFT catalyst is highly productive and active, and the favorable economics have resulted in it being selected for various projects. The EFT catalyst is commercially available for use on GTL projects.

GP. Is GTL a good solution for stranded gas in remote locations and harsh environments?

Miller. Yes. The potential and volume of stranded gas in remote locations make GTL an attractive option for those types of applications. It is important to assess the volume of the stranded gas in various fields to couple the appropriate size and number of GTL facilities for that field. Facility capacity can be constructed and adjusted to match the field size.

Stranded gas is also a viable means for skids and modules, depending on the location, the field size and the GTL volume required. Utilizing GTL for these stranded fields is an appealing means of developing them.

For these locations, the infrastructure, product handling and transportation of the GTL liquids require close evaluation. As part of the site field assessment and development in these remote locations, it is necessary to best determine how to deliver the product to market.

GP. Has the oil price drop affected the GTL market?

Miller. The reduction in oil prices has impacted the economy as a whole, from a gas processing perspective. While transportation-type GTL fuels derived from natural gas have seen reduced margins, specialty products derived from the GTL process have higher margins and have not realized the same impact. Projects to upgrade GTL products to lubricants and waxes have an opportunity despite the lower oil prices due to these higher product margins.

Additionally, the GTL business has the versatility to produce GTL liquids from feed sources other than natural gas, resulting in a generation of valuable products that are less sensitive to oil prices.

Furthermore, environmental drivers to reduce emissions can also support GTL production that is less sensitive to oil prices. Lubricants from GTL are more environmentally friendly than traditional oil-based lubricants.

GTL simply requires syngas as a feedstock for the reaction. There are a multitude of other markets, aside from oil-based drivers, to create a starting-point feedstock for GTL synthesis, such as biomass, flared and stranded gas, and other zero-carbon-fuel or low-carbon-fuel feedstocks.

GP. What are the biggest challenges and solutions for companies that want to acquire and operate GTL facilities?

Miller. Two key challenges are, first, establishing the infrastructure to address the gas supply and the liquid products and, second, developing an economic, attractive solution for the overall facility.

The first challenge that the industry is facing is to develop the infrastructure to accommodate the liquids generated at proposed GTL facilities on the product end. Pipelines often are not available to accommodate these syncrude or lubricant products. Instead, facilities are handling these products via rail or trucking.

Another challenge is to develop the gas gathering and collection facilities to feed smaller GTL units in remote locations where stranded gas exists or where wells are presently shut in.

Second, finding a solution to satisfy the economics of the facility is a problem that companies are facing while oil prices are depressed. However, through creative technologies like skid packaging, as well as developing specialty product lines, B&V and EFT offer solutions that are attracting attention due to favorable economics.

GP. What new or next-generation GTL technology will B&V roll out in the near future?

Miller. Stay tuned through the year as B&V and EFT release information on the FLARE BUSTER® plant design. This concept is designed to utilize stranded gas or flared gas on smaller-scale volumes, such as through individual plants in the 500-bpd to 1,000-bpd range that are capable of producing GTL products.

The FLARE BUSTER design will be a skid-based, transportable solution to achieve flexibility in installation and relocation, as well as to reduce construction challenges in remote locations. This will result in emissions-control benefits for locations that are heavy in gas flaring. It will also provide a way to produce at wells that are shut in because of insufficient means to consume the produced gas. GP

Doug Miller is vice president and business line manager of oil and gas operations for Black & Veatch (B&V). At present, Mr. Miller is responsible for execution oversight for the oil and gas business line within B&V’s energy business. In this role, he ensures that project team activities reach successful execution, including cost and schedule objectives, as well as safety and quality plans, for the entire scope of work. Additionally, Mr. Miller assists business development activities to foster growth in B&V’s strategic plans. These activities address the full realm of midstream gas processing involving treating, NGL recovery, fractionation and activities for other means of monetizing natural gas, such as GTL technology. As a chemical engineer, Mr. Miller previously served as the process chemical department manager for B&V. Prior to that role, he held positions over 24 years as a project manager, chief engineer, engineering manager and principal process engineer. Mr. Miller began his career as a chemical engineer for Eastman Kodak in Longview, Texas. He is a registered professional engineer in Kansas.