Monday, May 14, 2012

300,000 Barrels per Day of New Synthetic Crude from Russian Stranded Gas?

Russian gas companies are notorious for their wasteful flaring of stranded natural gas and associated gas. If all of that wasted gas were converted to liquid fuels via GTL processes, it could amount to as much as 300,000 barrels per day of new production of synthetic crude.

Rosneft is planning a pilot GTL plant in the Volga region, using Oxford Catalysts scalable microchannel Fischer Tropsch GTL technology, in an attempt to develop productive uses for this huge -- but now largely wasted -- natural gas resource.
Rosneft is partnering with technology commercialization firm Gazohim Techno to design and construct a GTL demonstration plant using Oxford Catalysts’ microchannel Fischer-Tropsch technology. This plant will have a capacity of some 10 million cubic meters per year of natural gas, equivalent to approximately 100 barrels per day of synthetic crude.

...Rosneft has a stated objective and budget to reduce flaring and make better use of associated gas. This facility is envisioned as the first of many commercial GTL plants that will make use of associated gas.
After an extensive review of alternative Fischer-Tropsch offerings we decided to move forward with Oxford Catalysts’ technology. We found it to be the most attractive in combination with our POx process for the mini-GTL market we’re targeting. The potential in Russia for processing associated gas is over 30 billion cubic metres a year. —Sergey Dolinskiy, CEO of Gazohim Techno
We have been predicting that Russia would be forced to move to GTL technologies, to increase the value of its huge reserves of natural gas -- stranded or otherwise. This announcement by Rosneft is a simple acknowledgment that Russia cannot continue to waste its resources as it has in the past.

In the relatively near future, it is likely that Russia will be forced to look at larger scale GTL facilities similar to the Shell Pearl Qatar GTL plant, which cost about $20 billion to develop and build -- but which is expected to earn about $6 billion per year in profits.

To move up into that range of GTL production, Russia will need foreign partners. To assure foreign partners that their valuable assets will not be seized by the Russian government -- as has happened so many times in the past -- Russia will need to make some substantive changes in its way of doing business.

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