Gas-to-Liquids
The World Bank estimates that 134 billion cubic meters of gas was flared worldwide in 2010, equivalent to almost 5 trillion cubic feet. If all this gas was converted to liquid fuels, it would equate to around 500 million barrels each year. Vast shale gas reserves have been discovered in North America and the majority of gas reserves worldwide are not big enough to make conventional GTL, LNG and CNG economic. In addition, trillions of cubic feet are reinjected every year at a cost, in order to avoid flaring.
Not only this, but less than 5% of stranded gas fields can be economically exploited using conventional technologies such as LNG and CNG, and the rate of production possible from these reserves is way below the 30,000 barrel per day typically needed to make conventional GTL plants economic.
But much of this gas can now be captured and used on the small scale, economically. As the world searches for the security of new energy and fuels sources, microchannel GTL has the potential to unlock a vast quantity of the fossil reserves currently inaccessible. We believe that currently flare gas could generate around 3 million barrels per day of synthetic fuel, and 'problem' gas, either stranded reserves or that associated with crude oil which would currently be reinjected, a further 20 million barrels per day.
The prospects for GTL are strong, and getting stronger. The development of North American shale gas is having a dramatic impact on gas markets. As a result, the supply and demand balance of gas has changed and the traditional pricing ratio between oil and gas has been broken. The US Energy information Agency forecasts years of steadily increasing oil prices but gas prices which will remain low. GTL, converting low value gas into high value clean synthetic oil, provides a significant financial opportunity.
Meanwhile, competition for hydrocarbon resources is intensifying. 'Easy oil' is more difficult to come by due to political, geological and deepwater risks, highlighting the need for economic small scale technologies. International Oil Companies need to diversify to gas reserves outside of the National Oil Companies’ control, many of which are too small to be monetized with conventional technology.