With advances in both floating production and gas-to-liquids (GTL) technology, a floating GTL solution could soon address stranded gas problems around the world.

Options for handling either produced gas or developing stranded gas in offshore areas, whether in shallow or deep water, are now such that an operator has a number of choices. Obviously the first choice, if available and economic, would be a pipeline to shore, but that unfortunately is not always possible. Other solutions that are now being offered to the industry are compressed gas tankers, floating liquefied natural gas (LNG), floating gas-to-liquids (GTL) and even floating deepwater electric power facilities with high voltage DC transmission to the beach.

All of these solutions will have merits and problems, depending upon the location and size of the reserves. Based on the economics that have been released, floating LNG looks like a sound option for reserves over about 5Tcf but is probably unsuitable for smaller reserves. A number of compressed gas options have been announced, but to date their comparatively high cost and limited capacity have meant that they have yet to find a market.

GTL can also be a viable option and should be economic over a wider range of sizes and locations than its competitors, although it is not the answer for all. The GTL industry has yet to fully demonstrate its commercial viability onshore, but the first commercial plants are now being built, and it is only a matter of time before commercially viable offshore facilities are in service. Some of the challenges facing the offshore GTL industry are addressed below.

From concept to reality

Right from the beginnings of the GTL industry some of the players have harbored ambitions of taking the process offshore in order to take advantage of the large volumes of gas that are stranded around the world. Some players and pundits have said that it will never happen, but others have had a more positive view. There are now a number of individual companies or consortia moving forward with the concept, and some have reached quite advanced stages of engineering design.

Taking any form of new technology offshore for the first time will always be a challenge, particularly when that technology utilizes processes more normally found in a refinery. Then there are some psychological challenges to overcome as well. Most experts agree that the sheer physical size and weight of a typical GTL plant will limit the overall maximum capacity of an offshore GTL facility until such time that there is a further major technological breakthrough. Realistically, Fischer Tropsch GTL plant sizes for offshore use will probably be restricted to somewhat below 20,000 b/d of liquid production, requiring a clean gas supply in the region of 200 MMcfd. In theory, plants can be as small as required. However, due to the additional costs of very small facilities on a cost-per-barrel basis, plants below about 5,000 b/d will probably be restricted to specialized applications.

Syntroleum is currently involved in the engineering and basic design of a number of offshore facilities ranging from a very sophisticated unit that is being designed to deliver a single product for military applications to a design that is specifically aimed at the smaller, more marginal application that requires a simpler and cheaper solution. The first of these projects is a design being done for the US Dept. of Defense (DOD), and another is a smaller, less sophisticated facility known as the "Hedgehog" project.
Both of these designs are for comparatively benign water conditions - the DOD project, for instance, has a requirement to work in Sea State 3 conditions. A number of customers are interested in designs suitable for operation in harsh weather areas, and we are confident that, given a little more time, such units can be delivered. Difficulties can arise because some of the reactors and columns are sensitive to motion, but the design issues can be resolved. However, we believe that the industry needs to demonstrate that GTL facilities can be constructed and operated in a calm offshore environment before we move forward with the second generation of plants designed for harsh weather conditions.

Syntroleum was awarded a contract in late 2001 for the development of a Single Battlefield Fuel for the DOD that consisted of a number of discrete parts. In conjunction with experts from the DOD, the company prepared a basic specification for the fuel and then manufactured and delivered a quantity from our facilities in Tulsa for testing and additive development purposes. The product is basically a synthetic JP5-a high flash-point jet fuel - that can be used in all military applications from fixed-wing aircraft to helicopters, from tanks to frigates and from Hummers to fuel cells. A major part of the program was to prepare a base design for a marine mobile unit capable of delivering a quantity of finished JP5 product. This design, which is due to be completed in August of 2003, is well underway, and the basic design is shown in Figure 1. The design will also be suitable for commercial application. The DOD barge is very sophisticated and will have the capability of delivering a number of finished products such as diesel, kerosene, naphtha and commercial jet fuel as well as the highly specialized JP5 product. A full commercial design of this size and type is already gaining the attention of some operators, but the commercial design will probably only produce diesel, naphtha and possibly some liquid propane gases (LPGs).

Such sophistication is not always required or economically attractive, and a smaller, cheaper commercial unit is the objective of the Hedgehog project. The base design will deliver some product and some synthetic crude for shipment to refineries. Because all GTL processes produce an amount of high-melting-point wax, the Hedgehog design has the minimum facilities needed to convert this into readily transportable product. This option should be of great benefit in more remote areas and for operators requiring a simpler and cheaper solution to the full and sophisticated design of the DOD type.
There are a number of drivers in taking any technology offshore, and the main drivers for the use of GTL offshore are:
• safety;
• size;
• operability/reliability; and
• cost/economic viability.

Safety issues

In Syntroleum's current marine designs the issue of safety has been paramount and a major factor in the planning and execution of the work scope. For the DOD project, the main kick-off meeting was in fact a lengthy risk assessment exercise. This has been followed up by further formal reviews as necessary, but the whole project has been done with risk reduction and mitigation as a prime aim. Interestingly, most of the items that were coded '"red" were actually perceived risks rather than actual risks, primarily because the typical engineer working on offshore designs has no experience working on refinery-style catalytic processes, and the typical refinery engineer has no knowledge of the specialized requirements for offshore design.

Because of the different skills that need to be brought together, it is doubtful that any one company has the necessary experience to deliver a safe and viable offshore GTL project at this time. Bringing the right team together to look at these issues was considered to be of prime importance, and the DOD team of Syntroleum, Amec Capital Projects, Amec Offshore, Bath Iron Works and the American Bureau of Shipping have the right and necessary experience between them.

The use of oxygen offshore has been the subject of some heated debate in the industry, and while we would not state that the use of an oxygen-based system offshore is inherently unsafe, the use of an oxygen-based GTL system introduces an additional risk that an air-blown system does not. Technology providers, field owners and operating staff will have to accept, as we have in the past, that working with natural gas can be a hazardous occupation. Therefore, when introducing a new process technology offshore, everything possible should be done to minimize any additional hazards.

Facility size

Another major advantage inherent in the Syntroleum design is that of size in that it is somewhat smaller overall than conventional oxygen-based systems. The company currently is working on designs ranging from world-scale land-based plants of 100,000 b/d and larger down to small packaged units suitable for offshore or remote application use down to 1,000 b/d or lower.

However, the relative size in offshore terms is still large and, more importantly, heavy. Some of the individual reactors, with all their supporting structure, will weigh several thousand tons - considerably larger and taller than what one normally expects to see on the deck of a floating production, storage and offloading vessel (FPSO). This will mean that the substructure - whether a platform, ship-shaped vessel or barge, will probably be a new-build rather than a conversion. The retrofit of enough supporting bulkheads within an existing vessel will probably far outweigh any extra cost of a new build. All of Syntroleum's current work is predicated on new-build barges, although they can easily be adapted for a conventional ship-shape design.

Operability/reliability

Crews working on a GTL vessel will need some specialized training over and above that normally required for operation of an FPSO. However, the GTL operation is not expected to add significantly to a typical operating load onboard an FPSO. Start-up and commissioning are areas that will require special attention, but running in steady-state conditions is expected to be reasonably easy.
Typically we would expect average annual operating uptime would be 340 days per annum based on a 5-year major maintenance/catalyst replacement cycle.

Costs and economic viability

For the basic DOD design cost estimates are already down to +/- 30%, and it's expected that the capital costs are such that the facility can be built and operated commercially. Of course, the Hedgehog design, being simpler and cheaper, will meet the commerciality threshold for a wider range of applications.
Recent studies have shown that plants ranging upwards from 2,500 b/d could be economic on a stand-alone basis. This economic calculation obviously depends upon a number of factors such as facility size, cost of gas, distance to market and produced products. While commerciality cannot be guaranteed in all situations, even small offshore plants can be economic if they release crude oil that otherwise could not be produced.