Argus Americas Base Oils Summit Houston May Iraj Isaac Rahmim, PhD E-MetaVenture, Inc. Houston, Texas

Transcription

1 Argus Americas Base Oils Summit Houston May 2012 Iraj Isaac Rahmim, PhD E-MetaVenture, Inc. Houston, Texas Ron Sills, PhD Director XTL and DME Institute SM Houston, Texas Copyright 2012 by E-MetaVenture, E Inc. All Rights Reserved.

2 GTL in the News Shell Pearl start-up in 2011 First shipment of base oils arrived in Houston on November, 2011 When operating at full capacity: 30 KBD Group III base oil Shell Lubricants will use GTL base oil in its premium motor oils

3 Realities of GTL Base Oils Topics

4 Routes for Conversion of Methane After Natural Gas Production, Processing, Transport by Rojeyet et al.

5 Key GTL Steps Gas Separation and Purification Syngas Production Partial oxidation: CH 4 + O 2 CO + 2 H 2 (exothermic) Steam reforming: CH 4 + H 2 O CO + 3 H 2 (endothermic) Fischer-Tropsch Process CO + 2 H 2 + H 2 O (very exothermic) Product Upgrade

6 Brief GTL History

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8 Commercial Status & Directions Plant Year Startup Total Capacity, KBD Base Oil Production, KBD Current Sasol II/III Secunda, RSA Some wax production Sasol I Sasolburg, RSA some wax production Shell Bintulu, Malaysia small PetroSA Mossel Bay, RSA none Sasol/QP Oryx I, Qatar none Shell/QP Pearl, Qatar up to 30 Near Term Sasol Chevron Escravos, Nigeria 2013 (?) 33 none Possible Future ( ) Sasol/Uzbekneftegaz/Petronas, Uzbekistan 33 none Sasol, Canada 48 not announced Sasol, USGC not announced Shell, USGC 140 not announced

9 Why New US Interest in GTL (1)? New shale plays

10 New Shale Plays & US NG Pricing Argus US prices $160 $140 $120 WTImonth 1, NYMEX close, midpoint, USD/BBL, FIP $16 $14 $12 $100 $10 $80 $8 $60 $6 $40 $20 Natural gas Nymex(USP) month 1, Houston close, settlement, USD/mmBtu, delivered $4 $2 $0 $0 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12

11 Impact of US NG Pricing on GTL Economics Argus USGC prices; EMV internal GTL design and economics studies 250 BASE OIL GRP III (4 cst) US $/BBL Liquid Product GTL per BBL COST(incl. CAPEX, OPEX)(EMV Internal) ULS DIESEL (61, 10 ppm) Houston JET/KERO (54) Houston NAPHTHA (40 N+A) Houston GTL NG FEED COST per BBL LIQUID PRODUCT (NYMEX) 0 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12

12 Major GTL Products LPG Naphtha Jet-Kero /Diesel ( Middle Distillates ) Lubes Similar to other plant (LNG, refinery) LPG Straight chain paraffinic Near zero sulfur High cetane Near zero sulfur From isomerization of GTL wax High isoparaffins: good pour point; high VI (140+); low volatility Can be co-processed and marketed with them Preferred use: steam cracker feed Low density Low aromatics Low viscosity Virtually no sulfur, nitrogen, aromatics Low naphthenes: good oxidation stability Narrow HC distribution Wax High quality Primarily linear Specialty α-olefins, Solvents, Detergents, Drilling Fluids,

13 GTL BasestockProperties After Fiato/ExxonMobil (Energy Frontiers Int l, 2005) Typical Group III (Manuf. A) Typical Group III (Manuf. B) Typical GroupIII (Manuf. C) GTL Typical PAO (Manuf. D) Kinematic Viscosity, 100C Viscosity Index Noack Volatility, wt% off max 12.7 Pour Point, C <-64 Sulfur, ppm 200 <5 <4 <1 <1 Cold -35C,cp

14 Lubes Markets Paraffinic Paraffinic basestockglobal market size ~ 870 KBD Rationalization of less efficient (Group I) plants Expansion of Group II/III capacity in south and east Asia ~ 800 KBD 867 KBD Assuming 1.6% growth rate: 1,000 KBD market size in ,300 KBD in 2035 GTL basestocks: closest to Group III 872 KBD Group III: 5% in % in KBD 62 KBD

15 How Much Lube Can a World Class GTL Facility Produce? Sample product slate for 100 KBD facility KBD (No Hydrocracking Operation) LPG 2 Naphtha 18 Jet-Kero /Diesel 50 Lubes 30 Wax 10 Specialty α-olefins, Solvents, Detergents, Drilling Fluids, One world-scale GTL could produce as much as 30 KBD lube basestocks (50% of current Group III supply) Globally, possibility of 200 KBD of GTL lube base stocks by 2020 Aside: global wax market ~ 100 KBD Potential market destruction due to low elasticity

16 Hydrocracking of GTL Wax to Liquid Fuels Sample product slate for 100 KBD facility No Hydrocracking With Hydrocracking LPG 2 4 Naphtha Jet-Kero /Diesel Lubes 30 <1 Wax 10 <1 Specialty α-olefins, Solvents, Detergents, Drilling Fluids, Methane, LPG Naphtha Diesel, Jet

17 Cracking from Higher to Lower Value Products! 250 BASE OIL GRP III (4 cst) US $/BBL Liquid Product GTL per BBL COST(incl. CAPEX, OPEX)(EMV Internal) ULS DIESEL (61, 10 ppm) Houston JET/KERO (54) Houston NAPHTHA (40 N+A) Houston GTL NG FEED COST per BBL LIQUID PRODUCT (NYMEX) 0 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12

18 FT Diesel v. Global Middle Distillates Projections at 3% annual growth KBD 70,000 60,000 50,000 40,000 30,000 World Asia Pacific Africa Middle East Former Soviet Union Europe S. & Cent. America North America Unlikely to Have Large Supply v. Demand Impact 20,000 10, XTL Diesel Supply (proj.): million BPD

19 Were US GTL Economics Always Good? Argus prices; EMV internal GTL design and economics studies $/BBL Liquid Product GTL PER BBL COST (incl. NG feed, CAPEX, OPEX) EMV Internal Sasol announces study of KBD US GTL ULS DIESEL (61, 10 ppm) Shell announces study of 140 KBD US GTL 0 Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12

20 US GTL Growth Issues Low-price natural gas availability Shale gas, coal bed methane, Environmental concerns (e.g., fracking), politics, policy Competition for capital $60-80,000/BBL capacity (100 KBD ~ $6-8 billion) Liquid fuel product price stability Federal and State policy development Climate change and energy security policy Cap & trade coming? Tax and regulatory advantages for alternative energy technologies Permitting environment and timeline Not to forget: New US GTL facilities may or may not produce base oils

21 Impact of GTL Lubes

22 About E-MetaVenture, Inc. Consulting, Design, Training firm established in 2000 XTL, petroleum refining & gas processing, novel technologies Feasibility studies, technology evaluation, process design, energy optimization, project development, litigation support, customized training, strategy development Active in the Middle East, East Asia, North & South America, Europe

23 About the XTL & DME Institute SM An educational service provided by Dr. Ron Sills (Ronald A. Sills, LLC) and Dr. Theo Fleisch(Fuel Conversion Solutions, LP), Co-Directors, on all aspects of the XTL supply chain. DME Fundamentals Tutorial at DME4 in Stockholm, September, 2010 XTL Tutorial at Future Fuels for Australia Conference in Brisbane, July,

24 Contact Information Iraj Isaac Rahmim, PhD E-MetaVenture, Inc. P. O. Box Houston, Texas USA iir at e-metaventure dot com www dot e-metaventure dot com