Tony Hayward, who resigned as BP plc Group CEO following the turbulence that followed the the Macondo well blowout in the Gulf of Mexico’s deepwater, has taken over as chairman of CompactGTL, which has pioneered a modular gas-to-liquids (GTL) system for flared natural gas.

The UK-based company, said Hayward, is focused on an “untapped sector of the oil and gas industry, helping to change the perception of GTL through providing a game-changing, economically viable solution to the global problem of gas flaring…

“With international oil prices set to stay high but regional and local gas prices heading in the opposite direction, this is a very good time to be pursuing this technology, which has the potential to add significant value to operations through monetizing oilfield gas.”

Hayward has been running Genel Energy plc, an Anglo-Turkish explorer. He also participated in Vallares plc, an energy fund vehicle backed by a group of investors (see Daily GPI, June 20, 2011).

People often have dismissed GTL projects because they are costly, “very big and complicated,” said Hayward. “But if you can put something out there that’s low cost, simple to deploy and can be built in a year or two rather than seven or 10, then there will be a lot of appetite.”

Royal Dutch Shell plc is the dominant leader in giant global GTL technology. Its $18 billion Pearl GTL plant in Qatar is the largest of its kind in the world, capable of producing 140,000 b/d from the offshore North Field (see Daily GPI, Nov. 29, 2011). Shell is said also to be contemplating GTL ventures in the United States (see Daily GPI, Nov. 15, 2012). Meanwhile, South Africa’s Sasol Ltd. is building a 96,000 b/d GTL facility in Westlake, LA, which would be the second largest of its kind after Pearl (see Daily GPI, Dec. 4, 2012).

CompactGTL is on the other end of the spectrum. The smaller plants are designed to harness flared gas from oilfields. The company’s first commercially operating modular GTL plant was completed for Brazil’s Petrobras for one of its floating, production storage offloading projects. CompactGTL also has an agreement to work on offshore projects for Dutch-based SBM Offshore.

The World Bank has estimated that more than 5.3 Tcf of natural gas is flared and vented every year. Flared gas has become a growing problem in the U.S. onshore, as producers develop more unconventional and tight oil plays. According to the U.S. Energy Information Administration, a lack of gas pipeline capacity and processing facilities in the Bakken Shale caused more than one-third of North Dakota’s gas output to be flared or otherwise not marketed in 2011 (see Daily GPI, Oct. 12, 2012). One of the Bakken’s biggest oil players, Continental Resources Inc., late last month pledged it would reduce flaring by as close to zero percent as it could (see Daily GPI, March 4).

The CompactGTL executive sees an opening. “If there’s an opportunity to turn gas that’s flared today into oil” and oil products, “people would jump at it,” Hayward said.

Officials have identified more than 800 oilfields around the world that hold an estimated 73 billion bbl of reserves, where small GTL facilities could make a big economic impact. The technology could be used on existing onshore and offshore operations, as well as in remote locations to take care of stranded gas were large-scale converters would be impractical.

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