Neville Hargreaves SMi Gas-to-Liquids, October Smaller scale GTL The new paradigm in the age of gas

Transcription

1 Neville Hargreaves SMi Gas-to-Liquids, October 2015 Smaller scale GTL The new paradigm in the age of gas

2 It all began with coal 2

3 Then came oil 3

4 Centralised production was born 4

5 We are entering the age of gas 5

6 But gas is hard to transport 6

7 And hard to use in today s transport system planes, trains, ships, road vehicles and the infrastructure to fuel them rely on liquid fuels 7

8 GTL is a solution yet conventional GTL needs scale 8

9 Think Smaller TM

10 Smaller is driving progress everywhere 10

11 Thinking smaller is bringing GTL to the mainstream Large-scale economics at smaller scales Conventional Fischer-Tropsch reactor Note: Reactor capacities differ considerably Velocys Fischer-Tropsch reactor 11

12 Think Smaller means...

13 Nothing wasted Smaller scale GTL makes the most of the resources available Convert undervalued gas into higher value liquid fuels Unlock stranded gas Produce oil without flaring gas Use any type of gas available 13

14 Better options Smaller scale GTL offers more companies access to higher value markets Opportunity for producers to diversify and increase revenues Choice from a range of high value products Greater breadth of customers, locally and globally Smaller, lower cost plants need less gas to be profitable 14

15 Moving faster Smaller scale GTL realises profits faster Shortens the time between concept and being operational Build plants wherever the opportunity is Accesses markets faster no need for pipelines Enables products to be sold locally 15

16 Weathering the storm GTL in a low oil price era

17 The current low oil price reality Smaller is surpassing conventional GTL 17

18 Conventional GTL constrained to the coast Can t be located at the most advantaged locations Operating conventional GTL plants Shelved conventional GTL plant 18

19 Where smaller scale GTL makes sense in a low oil price world. Sales pipeline project drivers Low cost feedstocks Biomass, waste and coal; (Red Rock Biofuels, GreenSky) Landfill gas - ENVIA Flared gas in e.g. Russia, Far East, Central Asia Isolated markets Alaskan North Slope Mines in outback Australia Remote Russia, Northern Canada and Central Asia High value speciality products Ashtabula GTL, waxes in US mid-west Also base oils for lubricants and drilling fluids US and in overseas markets 19

20 Project driver High value speciality products

21 FT top quality, valuable products Pure, paraffinic hydrocarbons made fit for purpose Syngas Co catalysed FT Syncrude Straight chain paraffinic hydrocarbons Highest quality and reproducibility sulfur, amine and aromatic free Excellent eco-tox profile products Performance advantages in high end product formulations Added value specialty products Hydrocracking Gasoline blend-stock Transportation fuels, tar diluents Mixed solvent Coatings, adhesives Pure solvent Pharma, electronics, personal care Kerosene Aero fuels, surfactants Diesel Transportation fuels Group III+ base-stock SAE 0W-20 engine oil Medium wax Candles, construction, tyres Hard wax Adhesives, polymers, personal care 21

22 Premium pricing for FT specialty products - wax High value and less correlated to oil price 22

23 Wax production in US Market dynamics Transformation in oil refineries Only 30% of the oil refineries in the USA producing on average 3 times the volume of products than in the 1980s Rest of the world is following the USA s lead as vehicle technology and regulatory norms become globalised Leading to a reduced supply of traditional by-products such as petroleum wax US supply of wax for use incountry has decreased by 66% since the late 1990s Source: EIA 23

24 US import sources of wax Majority from growing Asian economies The US currently imports over 70% of its wax demand, mainly from Asia China Japan But Asian refiners are converting to modern technologies, further reducing the supply of wax Other SE Asia Europe Demand for wax increasing in Asian markets South Africa Canada Wax predicted to become scarce and expensive, worldwide Other Source EIA (2011) 24

25 Wax production Smaller scale GTL an alternative source of wax Users will need to find new sources of wax And alternative solutions to produce it Shale gas is a distributed phenomenon and smaller scale GTL delivers value at distributed scale Enable the rebuilding of local supply chains for these products wherever there is a source of low value gas Enhanced value can be generated from specialty products while producing ultra-clean fuels 25

26 Ashtabula GTL project Looking to supply high-value speciality products to the industrial heartland of the US 4,800 bpd plant supplied from Marcellus Lake Erie Ashtabula GTL Future expansion planned to 10,000 bpd Letters of support from major lender & equity investor Water permit received Identified gas suppliers and offtakers 26

27 Technology deployment Development of a supply chain & operational readiness

28 Scale-up of commercial catalyst manufacturing Ready to deliver Pilot scale Multiple runs yielding a combined 1.5 MT Lab scale gram quantities produced multiple runs Developmental scale kg quantities produced multiple runs 4 Commercial scale Full commercial lot sized produced by 2 manufacturers. QA/QC established 4 year commercialisation program 28

29 In-situ catalyst change-out in the field Key partnership for commercial catalyst handling Industry standard approach In-situ catalyst change out (not reactor swapping) Partnering with a world leader in the field of catalyst handling: Mourik Best in class provider Over 30 years experience in catalyst handling Catalyst loading in the field FT catalyst handling provider for Shell s Bintulu and Pearl FT plants Entire process successfully completed on a commercial reactor with Velocys catalyst Protocols finalised, meeting Mourik s safety standards Process declared fit for commercial application 29

30 Pilot plant runs over the last 18 months Reduced start-up time 30

31 Smaller scale GTL is now a reality

32 First ENVIA Energy plant being built Adjacent to WM East Oak landfill in Oklahoma City, USA 32

33 ENVIA Energy Oklahoma City project Landmark for GTL Landfill gas + natural gas as feedstock Major companies committing to smaller scale GTL Entered into all main contracts Construction underway Manufacture of FT catalyst and reactors complete Mechanical completion expected H Will be our commercial reference plant a major milestone Demonstrate parallel operation of fullscale Velocys reactors 33

34 Site preparation work continuing By Ventech and its subcontractors in Oklahoma City Photos taken early

35 Reactor cores being manufactured By Shiloh Industries, Ohio 35

36 Manufacture of FT reactors and catalyst complete All QA/QC protocols achieved 36

37 Module and vessel fabrication - progress At Ventech, Pasadena, Texas 37

38 And in the medium and long term

39 Mass market adoption of smaller scale GTL Based on oil/gas arbitrage opportunities 39

40 Summary The age of gas is forcing a rethink Prospects for mega-projects are diminishing Traditional resources are becoming harder to find and reach, and supply chains are becoming strained Smaller projects means more opportunities, accessible to more companies Still many opportunities to turn gas into higher value fuels with smaller scale GTL Even in a low oil price world Huge opportunity longer term Commercialisation under way Plant under construction 40

41 Contact information Neville Hargreaves Business Development Director 115e Olympic Avenue Milton Park Abingdon OX14 4SA United Kingdom "Velocys, Think Smaller and the Velocys logo are trademarks of Velocys 41

42 Think Smaller