Greenway Technologies Inc (GWTI)

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Swan, not sure if you arleady saw this, looks promising. Whats ur take on the company n stock?

Portable gas-to-liquids plant promises to turn stranded gas to diesel or jet fuel

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Portable gas-to-liquids plant promises to turn stranded gas to diesel or jet fuel Paul Wiseman
Midland Reporter-Telegram Midland Reporter-Telegram | 0 comments

According to an April 2011 GE study approximately 5 percent of the world's natural gas production is wasted by flaring each year. This amount is equal to 23 percent of the total yearly natural gas consumption in the U.S.

Flaring emits 400 million metric tons of CO2 annually without any positive tradeoff such as electricity production. Those figures do not address the amount of natural gas that is simply vented into the atmosphere.


A partnership between 1st Resource Group, Inc. of Fort Worth and the University of Texas at Arlington (UTA) has led to the design of a portable conversion unit that will transform natural gas into clean-burning synthetic fuels. This fuel can be blended with either jet fuel or diesel at a refinery or by a jobber.

"This technology, a lot of it, is in the public domain," said Fred McDonnell, associate chair and professor of UTA's chemistry and biochemistry department. The basis of the technology is the Fischer-Tropsch process invented in Germany in the 1920s. Germany, being oil-poor and coal-rich, needed a process to convert gasified coal into vehicle fuel. Both the Nazis and the Japanese used F-T extensively to fuel their military vehicles in World War II.

The process usually involves large-scale plants requiring capital expenditures in the billions of dollars and turning out 30,000-100,000 bbl/day, according to McDonnell. The challenge presented by 1st Resource was to miniaturize both the plant footprint and the cost in order to make it useful for turning stranded gas into something that could be delivered to market instead of to the flaring tip.

As developed by UTA in partnership with 1st Resource, the "portable" version can be loaded into several 40-foot shipping containers and delivered to a well site. Once set up the equipment takes up an acre or a little more depending upon the nature of the terrain. The plant would turn out 500 bbl/day of fuel using 10 mcf of natural gas to produce each barrel, according to McDonnell. The plant will use 32 percent of its feedstock in "heat cost," the energy required to operate. The finished product will then be loaded into tanker trucks for delivery.

According to Clyde Pittman, director of corporate planning for 1st Resource, the company is expecting feedstock costs to be less than Henry Hub prices because, as stranded gas, it is worth less than it would be on the open market. However, 1st Resource is budgeting the process based on hub prices in order to allow some leeway in the bottom line.

McDonnell noted the gas-to-liquids (GTL) process requires oil prices of $70-$100/bbl to be competitive. "If oil were at $40/bbl, this would not be profitable," he said.

Because the process's end product is "too pure" to be put directly into a fuel tank because it has none of the required additives, Pittman said, it will be primarily used as a blend in either jet or diesel fuel. Diesel is heavier than jet fuel and the typical GTL product will be somewhere in between. Its advantage in diesel is that it has no sulfur content, making it environmentally friendly.

If the end product of a particular plant is always going to end up mixed with either diesel or jet fuel, said Pittman, the plant's operators can tweak the process to nudge it toward the appropriate weight. "We would be able, within a limited spectrum, to move the molecular population over toward the jet side or toward the diesel side," he said. Normally, however, the plant would put out a standard fuel that would be blended either way at the refinery.

End users, those who would burn the fuel in vehicles, have shown the greatest interest in the procedure, due to cost and purity of the product. They can arrange with refiners for the processing of the fuel, Pittman explained. "What this can do is, at a very reasonable price, elevate the quality of the fuel. For example, if you have D2 as one blend stock and you have our fuel as the other one, you can combine those and make something that is superior, even D5. Remember, we're a zero-sulfur fuel."

Currently, the only working model is in the lab at UTA. The first "live" plant is expected to be in operation by the end of 2011. Each plant will be operated as a partnership between 1st Resource and the producer, rather than being sold to that producer. Pittman explained that the complexity of the operation, requiring oversight by engineers and hands-on supervision by other highly-trained personnel, makes it imperative that his company maintain control of the process.

With so much stranded gas being flared or vented, Pittman reported that interest in the portable GTL plant has been incredible, especially since the process has only been recently announced. "We have had interest from every continent in the world except Antarctica." Inquiries have come in from both producers and end users.

UMED Holdings, Inc., is helping 1st Resource with the commercialization process. UMED's CEO, Kevin Bentley, said his company has had no shortage of parties interested in being the first to test the procedure. "We are looking for a 10-acre pad site. We have between 100 and 200 possible sites picked out. Now we just have to decide which is the right one to start with."

He added the options for producers and for marketing are practically limitless and that, unlike gas exploration, the portable GTL process will never involve a dry hole-it will always be productive. If a field begins to run dry, the plant can be packed up in those 40-foot containers and shipped to a more productive field.

With the world beating a path to the door of 1st Resources, the portable GTL process would seem to be the "better mousetrap." How 1st Resource came to team up with UTA will be discussed next week.

Paul Wiseman can be reached at [e-mail].