Conoco to Build $75 Million Gas-to-Liquids Demo Plant

In an effort to commercialize its proprietary technology for converting natural gas to liquids, Conoco said last week that it intends to build a $75 million demonstration plant in Ponca City, OK. The company said the economics of its gas-to-liquids (GTL) technology are often better than those of converting gas to liquefied natural gas (LNG).

Converting gas into liquids will enable the economic development of more than 4,000 Tcf of stranded gas reserves, which account for 80% of all known worldwide gas reserves, the company said.

"One of the greatest challenges we face today is how to ensure adequate, dependable and environmentally sound energy sources are available to meet the needs of our citizens," said Gary Edwards, Conoco senior executive vice president, corporate strategy and development. "The Bush administration [addressed] these issues in its...National Energy Policy. Part of the long-term solution will be to find more energy supplies that can be brought to market easily and cost-effectively, and we think gas-to-liquids technology can be a significant part of that solution, not only on a national scale, but globally."

Jim Rockwell, Conoco manager of gas-to-liquids, said "stranded reserves represent a tremendous business opportunity for a company with commercial GTL technology. Conoco's GTL technology has advanced to the point where a full-scale plant is economical. Building the demonstration plant will enable us to gather the engineering data required to design a much larger commercial plant."

Conoco believes that the new GTL technology has the potential for widespread environmental benefit, as it produces fuels like methanol and ultra-clean, sulfur-free diesel that could displace less efficient, higher emission fuels in the transportation industry.

"With GTL technology, stranded gas reserves can be converted into readily-marketable, high quality fuels and specialty products for domestic use and export," said Rockwell. "In most areas, the economics of GTL are better than those of converting gas to LNG. Plus, the large and growing markets for middle distillates will speed the development of GTL projects ahead of LNG."

The demonstration plant, which is scheduled for completion in September 2002, will convert natural gas into 400 bbl/d of sulfur-free diesel, jet fuel and other products, the company said. After proving its low-cost GTL technology, Conoco stated that it will continue to use the demonstration plant to test new gas-conversion and petrochemical technologies under development.

The company expects to begin construction of its first commercial plant by 2004. which currently would make it the first commercial plant in operation anywhere in the world.

In a recent benchmarking study, published this past January in Chem System's "Stranded Gas Utilization: Methane Refineries of the Future," Conoco's technology was ranked the most efficient in the industry. The company also said the U.S. Department of Energy will include its work on GTL as part of a research and development funding program to promote cleaner fuels.

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