SPE-183510-MS

Flared Gas Monetization with Modular Gas-to-Liquid Units: Oilfield

Conversion of Associated Gas into Petrol at Small-Scales

Zhong He, Gautam Khatu, and Emily Tenenbaum, Primus Green Energy; Weibin Li, Jereh Group; Zengqiang Han,
Jereh Oil & Gas Engineering Corporation

Copyright 2016, Society of Petroleum Engineers

This paper was prepared for presentation at the Abu Dhabi International Petroleum Exhibition & Conference held in Abu Dhabi, UAE, 7-10 November 2016.

This paper was selected for presentation by an SPE program committee following review of information contained in an abstract submitted by the author(s). Contents
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Abstract
Historically, gas-to-liquids (GTL) systems have only been implemented at large scales, such as the 1.6 BCF/
D Pearl plant in Qatar. However, recent advances in process design and cost reduction have resulted in
smallscale GTL systems profitable at gas flows of 110,000 to 540,000 Nm3/d (4-20 MMcf/d). Small-scale
GTL units are now an attractive option for monetizing associated petroleum gas that would otherwise be
flared. This paper describes the application of a smallscale GTL solution for flared gas monetization, and
details the process design, feed gas requirements, and liquid product specifications.
To address the problem of oilfield flared gas, a standard, modular lump-sum GTL system has been
developed to convert flows as small as 110,000 Nm3/d (4 MMcf/d) of wellhead associated gas into high
quality gasoline (a.k.a. petrol). The system accepts a wide range of wellhead gas types without modification,
for example wet or dry gas, and gas with up to 25% CO2 content are suitable feedstocks. The unit utilizes
the STG+™ process, which features a series of fixed bed catalytic reactors that convert gas into petrol
in a single gas phase closed loop via syngas, methanol and dimethyl ether intermediates. Process water
and unreacted light gases are recycled within the system, minimizing hydrocarbon loss and the need for
wastewater treatment.
The resulting petrol product can be sold into the regional fuel market or mixed in with the crude oil onsite
for simpler logistics. Compliance with antiflaring regulations, monetization of associated gas, reduction of
CO2 emission, and increased liquid output are achieved via implementation of the GTL system.
This standardization of small-scale GTL technology as a cost effective modular unit enables distributed
deployment directly at the wellhead that was previously not possible with traditional larger scale GTL
technology.

Introduction
In 2012, the total wastefully burned natural gas was about 3.5% of global supply, which is equal to 143
billion cubic meters. 90% of the flared gas volume is from upstream production areas mainly in the form
of associated petroleum gas, while 8% is from refineries and only 2% is from liquified natural gas (LNG)
terminals [1]. Russia has the largest flared gas volume shown in Fig. 1, while the USA leads in terms of
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number of flares (2399 out of 7467). There are several disadvantages of flaring the associated gas and
the two most critical ones for oil and gas producers are: (1) Loss of revenue due to the lost energy; (2)
Antiflaring regulations may force oil producers to close oil well production unless flaring of associated
gas is eliminated. Flaring is not complete burning. It generates black carbon particles, incompletely burned
hydrocarbons, dioxins, nitrous oxide, sulfur dioxide, etc. These by-products have a negative impact on air
quality. In addition, raw methane and CO2 emissions greatly impact climate change.

Figure 1—Top 14 countries for gas flaring in 2012, from ref [1]

A number of promising solutions are available in the market to monetize flared gas [2]; these can be
categorized into four groups: (1) Convert to LNG and / or CNG allowing cost effective transportation of
the methane to the market; (2) Convert into liquid products of higher values using the GTL processes; (3)
Locate electricity-hungry desalination plants and air separation units closer to oilfields to use the power
generated from associated gas via a power generation plant; (4) Other solutions including Gas to Wire and
LPG & NGL recovery. Each solution has its own advantages and disadvantages, and is economically viable
only at certain scales and scenarios.
Primus Green Energy has developed STG technology that converts natural gas into petrol, methanol,
or diluent. The STG+ technology is profitable at gas flows as low as 110,000 Nm3/d (4 MMcf/d). In
comparison with conventional GTL such as Shell's $24 billion Pearl FT plant, STG+ technology does not
require an oxygen plant, product upgrade, and power recovery. Other GTL technologies based on an MTG
approach suffer from high capital cost which makes small-scale applications unprofitable. Primus designed,
fabricated, and commissioned a commercial demonstration STG+ plant shown in Fig. 2 in November 2013
at Primus' Hillsborough, New Jersey headquarters, and it has been validated in over 8,500 process hours (as
of August 2016) converting pipeline natural gas into high quality petrol and methanol. This paper details
the process design, feed gas requirements, liquid product specifications, and also describes the various
applications of small-scale STG+ as solutions to problems including cost effective reduction of flared
gas. Small-scale GTL units are now an attractive option for both on-shore and off-shore gas monetization
applications without needing to increase gas pipeline takeaway infrastructure and capacity.
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Figure 2—Primus' commercial demonstration STG+ plant in Hillsborough, New Jersey

STG+ Petrol Technology

The STG+ process is comprised of steam methane reformer (SMR) for syngas generation and four fixed
bed reactors in series in which syngas is converted to a high quality synthetic petrol. A schematic of STG
+ Natural Gas-to-Petrol Process is shown in Fig 3.

Figure 3—Schematic of STG+ Natural Gas-to-Petrol Process

The Primus STG+ Natural Gas-to-Petrol System includes the following principal steps in one continuous
gas-phase process loop [3].
SMR: Natural gas or other hydrocarbon feed gas reacts with steam at a high temperature and pressure
to produce syngas (CO/CO2 and H2). SMR is a mature and robust technology ideal for remote locations
without using air separation units.
Reactor 1 (Methanol Synthesis): Syngas is fed to Reactor 1, which converts most of the syngas to
methanol when passing through the catalyst bed. The chemistry is equilibrium controlled, and any unreacted
syngas is recycled back from separator to reach a conversion higher than 98.5%.
Reactor 2 (Dimethyl Ether Synthesis): The methanol-rich gas from Reactor 1 is next fed to Reactor 2.
The methanol is catalytically converted to dimethyl ether (DME), which involves methanol dehydration to
form DME. Reactor 2 optimizes heat management, which in turn reduces the recycle rate to save OPEX
amd CAPEX.
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Reactor 3 (Petrol Synthesis): The Reactor 2 product gas is next fed to Reactor 3, containing the catalyst
for conversion of the methanol/DME mixture to hydrocarbons including paraffins (alkanes), aromatics,
naphthenes (cycloalkanes) and small amounts of olefins (alkenes), mostly from C5 (number of carbon atoms
in the hydrocarbon molecule) to C10.
Reactor 4 (Petrol Treatment): Reactor 4 provides transalkylation and isomerization treatment to the
products coming from Reactor 3. The treatment reduces durene (tetramethylbenzene)/isodurene and
trimethylbenzene components that have high freezing points and must be minimized in petrol. As a result,
the synthetic petrol product has high octane and desirable viscometric properties.
Separator: Finally, the mixture from Reactor 4 is condensed to obtain petrol. The non-condensed gas
and petrol are separated in a conventional condenser/separator, which is the far right element in Figure 3.
The process water is recycled back to the SMR as a feed, while the off-gas is recycled as a fuel for the
SMR burner.
The STG+ petrol system has several advantages over traditional GTL technologies, including:
1. Continuous gas-phase process, no intermediate condensations
2. Single ready-to-use product stream, no further refining needed
3. Features only standard components – fixed bed reactors, heat exchangers, compressors
4. Accepts CO2 and NGLs in feed gas
5. No process wastewater produced
6. Long catalyst lifetime; regeneration is only needed once per year
7. Optimized for profitability at small-scale

Feed Gas Requirements

STG+ technology converts natural gas into petrol or diluent via a series of fixed bed catalytic reactors.
Small-scale GTL units can be installed at existing well sites, providing an option for producers to upgrade
their associated gas (AG) into a higher value liquid such as petrol. The resulting petrol product can be sold
into the regional fuel market or mixed in with the crude oil onsite for simpler logistics. Additionally, STG
+ system accepts a wide range of wellhead gas types without composition modification, for example wet
or dry gas, and gas with up to 25% CO2 content are suitable feedstocks. The feedstock flexibility is shown
in Table 1.

Table 1—Requirements for STG+ Feed Natural Gas

Species Limit

C1-C4 No limit, any mixture acceptable

Sulfur < 30 ppm

CO2 < 25 mol%

N2 < 5 mol%

Liquid Product Specifications

Primus' petrol meets most specifications globally without the need for additional refining. In the United
States, it exceeds the requirements for CBOB/RBOB grade petrol (Colonial Pipeline Company, 2016) [4]
and complies with other national specifications. The specification of typical STG+ petrol is shown in Table
2. Primus' petrol has a unique zero-sulfur, zero-benzene, and zero-lead profile and can be blended with
refinery petrol or sold directly into the wholesale market. Additionally, on-spec diluent can be produced in
regions with heavy oil production from STG+ systems for local consumption.
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Table 2—Specifications of Typical STG+ Petrol

Property STG+ Petrol

Octane Number RON 87 to 92

Octane Number MON 83 to 88

AKI (RON+MON/2) 85 to 90

RVP (psi) 5 to 10.5

E200 (vol %) 45 to 55

E300 (vol %) 77 to 83

Olefins (vol %) <1.5

Aromatics (vol %) <26

Benzene (vol %) <<0.1

Corrosion (D130) 1a

Stability (minutes, D525) >240

Sulfur (ppmw) -

A new technology is being developed by Primus to boost petrol research octane number (RON) to 100
from standard STG+ process. Primus can address fuels that meet European Union (EU) and Commonwealth
of Independent States (CIS) specifications. There is also potential for this high octane petrol to address the
needs of the low lead aviation petrol (avgas) market, which is currently sized at 150-200 million gallons
per year in the United States.

Implementation and Operation

A global leader in Gas-to-Liquids (GTL) technology, Primus Green Energy delivers solutions for gas
monetization based on its STG+ process. Primus was founded in 2001 and over the past 15 years it has
developed a portfolio of leading small-scale GTL technology. Located in New Jersey, Primus’ vertically
integrated headquarters include facilities for design, engineering, operator training and remote operation,
as well as R&D and catalyst development. Core to the business is the dedicated team, which represents
more than 300 years of collective experience at leading energy and oil & gas firms. Primus is committed
to continually developing new solutions and applications – as well as to advancing the existing systems –
in order to meet customers’ unique business needs.
Jereh is a global project developer and contractor in the areas of oil and gas, power, infrastructure
and environment. Jereh delivers integrated solutions flexibly and efficiently (investment, financing and
contracting) across the entire project life cycle. After 17 years of growth and development, Jereh has built
comprehensive capabilities in consulting, engineering, R&D, operation & maintenance as well as modular
manufacturing and management.
Together, Primus and Jereh have partnered to provide complete lump sum EPC gas-to-liqud solutions[5].
STG+ units can be developed and delivered within 18 months due to their standard modular design by Jereh,
which is much shorter than construction times for world-scale FT and stick built plants. In the modular
approach, the whole GTL plant is divided into a series of standard modules, fabricated at a pre-selected
factory, transported to the project site, and then erected onsite over a period of a few months, creating a
"plug-in and run" scenario. A schematic of a modular 500 bpd NG-to-Petrol STG+ plant is shown in Fig. 4.
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Figure 4—3D Schematic of modular 500 bpd NG-to-Petrol STG+ plant

The small footprint (30 × 50 m) and minimal infrastructure and utilities required shown in Table 3.by
the STG+ units enables them to be easily sited within an existing oil field, gas processing plant, chemical
plant, or refinery facility. Operation of the STG+ system is straightforward and in most cases only requires
one additional operator be added to the existing onsite facility staff. Routine mechanical maintenance and
catalyst regeneration takes place on an annual basis in a scheduled week-long shut down period, as the STG
+ units are designed for 356 days per year of operation.

Table 3—Typical STG+ OSBL Utility and Infrastructure Requirements

Utility/Infrastructure Notes

Power Used mainly for compressors, if reliable power grid is not

available locally, main compressors can be driven by gas
turbines or internal combustion engines

Demineralized water Used as boiler feed water for SMR

Cooling water (optional) Air cooled design is available for sites with restricted water
access

Nitrogen Primarily used during startup and shutdown

Hydrogen Only used in startup

Instrument Air Small quantity

Safety flare Existing onsite flare stack, if available, is typically

sufficient

Product storage tank

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Case Studies of STG+ Units

This section describes two case studies for STG+ units. The case model is based on projects in development
by Primus and its uptream clients.

Case 1 – Onshore Application

A customer in West Africa has access to gas resources that are currently wasted through flaring and re-
injection. The cost of the feed gas is zero. About 80% of the domestic demand for petrol in this country is
produced in a national refinery, and the balance is imported. Thus the client is now working with Primus to
explore a GTL solution for processing the wasted gas into petrol, which is easily marketable in the country.
After analyzing the feed gas composition shown in Table 4 and flow, an STG+ Natural Gas-to-Petrol unit
that produces 2000 barrels-per-day (bpd) of petrol from 17.2 MMcf/d of natural gas was proposed. A key
advantage for the gas producer is that the gas composition does not require any adjustment prior to petrol
conversion, thus saving the cost of gas processing that would be required by alternative gas monetization
options.

Table 4—Composition of Example Natural Gas Feed

Component Mole%

Methane 90.2

Ethane 5.1

Propane 2.0

Butane 1.6

Nitrogen 1.0

CO2 0.1

H2S 0

The feed natural gas is supplied at the STG+ boundary limit at a pressure of ~340 psig. The unit's
production cost for petrol, is projected at $0.50/gallon, which includes utilities, labor, and maintenance,
catalyst, and property tax/insurance expenses.
The STG+ unit will enable the customer to monetize wasted gas and move higher up the value chain by
converting wasted gas into a more valuable liquid product. After STG+ upgrading to petrol, the gas owner is
able to realize about $75 million in annual revenue from 17.2 MMscf/d of wasted gas with an unleveraged
return on investment of over 20%. About 1,190,000 MT/year of CO2 emission is eliminated by this gas
monetization when produing an equal amount of petrol by STG+ in comparision with traditional refining
of crude oil. In addition, there will be a reduction in imported petrol with more reliance on indigenously
produced petrol using associated petroleum gas.

Case 2 – Offshore Application

In 2014, Primus was awarded Approval in Principal for its Offshore Gas-to-Liquid Plant concept based
on STG+ technology from the American Bureau of Shipping. Primus' technology is suitable for offshore
application due to many advantanges, including:
1. No oxygen or air separation unit needed
2. Flexible feed gas requirements – minimal preconditioning
3. Low liquid inventory – liquid product can be mixed in with crude
4. Simple process – minimal moving parts, 100% gas phase
5. Automated/remote operation
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6. Process water is clean and is 100% recycled as boiler feed water

7. Flexible modular layout options for retrofitting to tight spaces
Primus is working with FPSO manufacturers to develop a cost effective solution to utilize offshore
associated gas which is presently being re-injected at vey high costs. It is expected that a complete
packaged GTL solution for off-shore applications will be available within one year, and the solution will
be competitive with other options such as FLNG.

Alternate production of methanol using the STG+ process

Primus has also developed a process to produce methanol in small capacities, using the STG+ process.
Instead of 4 reaction steps, only the first reaction step is used, followed by distillation to produce methanol
per International Methanol Producers and Consumers Association (IMPCA) spec. The requirements of the
feedstock are the same and flared gas is an excellent candidate. These small scale methanol plants are ideal
to meet focused localized demand centers that are far from large methanol producers, but close to low
cost natural gas. Primus, as an owner, has announced plans for executing their own 160 metric-ton-per-
day methanol plant in the Marcellus region of the United States to meet local methanol demand, using the
region's low cost shale natural gas; this project is now in the FEED stage.

Other Applications of the STG+ technology

Besides using natural gas of varying compositons from various sources including flared gas, stranded gas,
pipeline gas, our technology is adaptable for using syngas from other generation sources as a feedstock,
for example:

• Underutilized reformers in existing refineries and chemical plants. These STG+ applications utilize
already built facilities and increase revenue from underutilized reformer assets.
• Syngas from biomass or coal gasification systems.

The syngas has to meet some simple conditions of ratio of hydrogen, carbon monoxide and carbon
dioxide.

Conclusions
STG+ technology offers an ideal solution to the lack of traditional natural gas pipeline infrastructure
in remote locations, enabling the monetization of gas that would otherwise be stranded or flared. The
standardization of small-scale GTL technology into a cost effective modular unit enables distributed
deployment directly at the wellhead that was previously not possible with traditional larger scale GTL
technology. Primus' STG+ technology creates extra revenue from zero or negative cost of flared gas, helping
producers continue operations and improve the environment as well. Primus, together with Jereh, uniquely
deliver complete lump-sum EPC gas-to-liquid solutions for fast and cost effective monetizing of associated
gas presently being flared.

References
1. Elvidge, C. D., Zhizhin, M., Baugh, K. et al. 2016. Methods for Global Survey of Natural Gas
Flaring from Visible Infrared Imaging Radiometer Suite Data. Energies 9 (1): 14-28. http://
dx.doi.org/10.3390/en9010014
2. Layfield, M. 2015. Creating Value from Flared Natural Gas. Presented at Abu Dhabi International
Petroleum Exhibition and Conference, Abu Dhabi, 9-12 November. SPE-177560-MS. http://
dx.doi.org/10.2118/177560-MS
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3. Primus Green Energy, Introduction to Primus' STG+™ Technology. available in http://

www.primusge.com/press-room/white-papers
4. Colonial Pipeline Company 2016. Product Codes and Specifications.
5. Jereh Oil & Gas Engineering Corporation, Gas-to-Liquids Solution. available in http://
en.jerehepc.com/sales/gas-to-liquids-solution.htm