Small gas-to-liquids plant planned for former Houston power plant site

Biofuels Power Corp. plans to build a small-scale plant to convert natural gas to synthetic crude on a former power plant site south of downtown Houston as it looks to capitalize on abundant supplies of cheap natural gas, the company announced Monday.

The gas-to-liquids plant is a pilot project, the first step in the Humble-based company’s plans to build several small plants at oil fields across the U.S. to capture and convert natural gas now stranded at well sites that don’t have processing or transportation infrastructure to carry the gas to market.

Advances in hydraulic fracturing and horizontal drilling have unlocked vast quantities of natural gas from dense rock formations, but producers have to burn off stranded gas for lack of a way to transport and sell it.

With its demonstration project, Biofuels Power Corp. hopes to show that small-scale gas-to-liquids plants are commercially viable alternatives for companies curtailing or stopping natural gas production because it’s too expensive to expand and build infrastructure to gather, process and transmit natural gas.

New legislation regulating flaring make such projects even more attractive, Biofuels Power Corp. said.

“With an abundant natural gas resource base, future gas-to-liquids developments like this could fill a need in the energy industry for decades to come,” Eric Gadd, chief commercial officer, said in a statement.

About 40 percent to 60 percent of the world’s proven gas reserves are considered remote or stranded, Biofuels Power Corp. said.

While gas-to-liquids conversion technology is not new — Germany used it during World War II to make fuel — interest has piqued recently as companies seek to take advantage of low natural gas prices and higher value petroleum products. Biofuels Power Corp. touted the project as the first in the United States to operate on a small-scale.

Large-scale facilities exist globally, including a joint venture between Shell and Qatar Petroleum, which converts 1.6 billion cubic feet per day of wellhead gas from offshore wells into hydrocarbon liquids. Royal Dutch Shell abandoned plans in December to build a large-scale plant in Louisiana, citing concerns about the high costs to development such a project and uncertainties about gas prices in the long-term.

Biofuels Power Corp.’s pilot project will be capable of converting 5 million to 10 million cubic feet per day of natural gas into 500 barrels per day of synthetic crude oil. The plant will be assembled by Dec. 31 at the company’s Houston Clean Energy Park, an industrial estate at 12100 Hiram Clarke Road once the site of a power plant for former local electric monopoly Houston Lighting & Power.

The company did not say how much the plant will cost. Officials could not be reached for comment Monday morning.

The Biofuels proposal joins a wave of new planned gas-to-liquids plants, estimated to cost a combined $14.7 billion, that will likely boost U.S. capacity to make hydrocarbon liquids such as jet fuel and diesel by 103,300 barrels per day, according to a study released in July by the University of Texas’ Center for Energy Economics.

The pilot project is a joint venture comprising Biofuels Power Corp., engineering and construction firm ThyssenKrupp Industrial Solutions and Liberty GTL, a South African company focused on developing small and medium-scale gas-to-liquids projects in the North American Free Trade Area.

BIOFUELS POWER CORP ANNOUNCES PLANS TO BUILD
GAS-TO-LIQUIDS PILOT PLANT
IN HOUSTON, TEXAS

http://www.biofuelspower.com/PressReleases/August2014.pdf

Houston, Texas (August 1, 2014) – Biofuels Power Corporation (OTCBB: BFLS) announced today that it has signed a letter of intent with ThyssenKrupp Industrial Solutions (Africa) (Pty) Ltd (“ThyssenKrupp”) and Liberty GTL, Inc. (“Liberty”) to build a small-scale gas-to-liquid demonstration facility in Houston, Texas (“GTL Pilot Plant”). The parties have established a non-binding target date to complete installation and commissioning of the GTL Pilot Plant on or before December 31, 2014. The purpose of the GTL Pilot Plant is to commercially demonstrate converting stranded natural gas resources to synthetic crude oil.

BFLS will operate the GTL Pilot Plant for the 2-year demonstration. ThyssenKrupp will provide technical services and contribute a previously operating auto-thermal reformer pilot plant of proven design (“ATR”), which will be used to generate synthesis gas feedstock for the production of synthetic crude oil. Liberty will provide intellectual property and operating know-how regarding crude oil synthesis along with the relevant catalyst supply. The Liberty technical team is also credited for designing the FT (Fischer Tropsch) Reactor which will convert the synthetic gas to synthetic crude oil. The GTL Pilot Plant will be assembled at the Houston Clean Energy Park, which is an industrial estate owned by BFLS.

The abundant supply and low cost of natural gas produced from unconventional shale resources enhances the opportunity to profitably convert natural gas to higher value liquid fuels. The focus of the GTL Pilot Plant will be to optimize design and operability of small-scale gas-to-liquid facilities capable of converting 5 – 10 million cubic feet per day of natural gas into approximately 500 bbls per day of synthetic crude oil. Building on Liberty’s previous engineering studies completed by ThyssenKrupp in 2013, BFLS and Liberty are in the process of completing engineering on a 500 bbls per day reference plant design with the goal of deploying multiple units in North America in the future. This process is scheduled to be completed in the coming weeks.

BFLS believes that gas to liquids projects of this size may be attractive to operating companies confronted with curtailing production or, in the extreme case, ceasing production due to capital cost barriers related to expansion of natural gas gathering, processing and transmission infrastructure. These “stranded gas wells” would be released for production if the planned GTL units could process the natural gas immediately after completion of the well.

Eric Gadd, the Company’s Chief Commercial Officer said, “This GTL pilot project is an important milestone toward our goal of installing small scale GTL plants at stranded gas well sites. The pilot plant will prove the commercial viability of deploying small-scale GTL plants in North America. With an abundant natural gas resource base, future gas-to-liquids developments like this could fill a need in the energy industry for decades to come.”

Wayne Stocks, the President of Liberty stated “Liberty has been through several years of extensive research and engineering studies and considers its IP, know-how and strategic relationships to be the key to unlock the considerable value in monetizing the abundant gas resources in North America. This plant will be a first for the United States and an important step to the future of clean fuels for the Nation. Liberty is proud to be associated with ThyssenKrupp and Biofuels Power and is truly excited to commercialize small-scale gas to liquids on a global scale.”

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.