A trio of companies has agreed to pursue a gas-to-liquids (GTL) demonstration project in Houston with the goal of bringing the technology to the gas patch, where stranded wells could be enlisted to produce synthetic crude oil.

Houston-based Biofuels Power Corp. has signed a letter of intent with ThyssenKrupp Industrial Solutions (Africa) (Pty) Ltd. and Liberty GTL Inc. to build a small-scale GTL demonstration facility with the goal of completing the facility by the end of the year.

Biofuels plans to operate the plant for a two-year demonstration period. ThyssenKrupp will provide technical services and contribute a previously operating auto-thermal reformer pilot plant of proven design, 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 Fischer-Tropsch reactor, which will convert the synthetic gas to synthetic crude oil. The plant is to be assembled at the Houston Clean Energy Park, which is owned by Biofuels.

The companies said 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." They intend to optimize the design and operability of small-scale GTL facilities capable of converting 5-10 MMcf/d of natural gas into about 500 b/d of synthetic crude oil. Biofuels and Liberty are in the process of completing engineering on a 500 b/d reference plant design with the goal of deploying multiple units in North America.

Target customers for the small-scale GTL plants would be operating companies facing the need to curtail or cease gas production due to a lack of gathering, processing or 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," Biofuels said.

"This GTL pilot project is an important milestone toward our goal of installing small-scale GTL plants at stranded gas well sites," said Biofuels Power Chief Commercial Officer Eric Gadd. "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."

The companies aren't the only ones working on an application for GTL technology in the energy patch. Primus Green Energy Inc. has a GTL solution for flared associated gas. North Dakota's Bakken Shale is a region where associated gas flaring has been particularly high (seeShale Daily, June 4). Others are pursuing small-scale GTL solutions using natural gas or biogas (see Daily GPI, March 25).