Gas-to-Liquids: What Is It and How May It Change the Natural Gas Marketplace? Part I

by Christina Nagy-McKenna, Enerdynamics Instructor

Gas-to-liquids (GTL) is a technology that chemically converts natural gas to a liquid synthetic fuel that can be used in place of diesel and jet fuels. The process is based on work done by scientists in the 1920s and the 1970s. While GTL can also produce other chemical feedstock, the primary commercial interest in this technology is the creation of transportation fuels.

For many years natural gas and crude oil prices moved in tandem with one another. If one went up or down, so did the other. Since 2009 when oil prices rose again after their spectacular rise and dramatic fall in 2008, natural gas prices have remained low. Analysts agree that the two fuels are now decoupled — they now move independently of one another. U.S. gas producers, flush in production from shale gas fields, have spent two years watching natural gas prices drop to levels not seen in a decade.

Although the U.S. imports liquefied natural gas (LNG), producers are now considering exporting LNG to Europe and Asia as gas prices there are much higher. GTL offers another way to monetize natural gas and get a piece of the more lucrative transportation fuels market instead of just a larger piece of the traditional end-user energy market.

How does it work?
GTL takes hydrocarbons such as methane-rich natural gas and converts them into longer-chain hydrocarbons such as diesel fuel. There are two primary processes:  Fischer-Tropsch and Mobile. Fischer-Tropsch was developed by two German scientists in the 1920s, while Mobile was developed in the mid-1970s. Fischer begins the process with the partial oxidation of natural gas (methane) into carbon dioxide, carbon monoxide, hydrogen, and water. The ratio of hydrogen to carbon monoxide must be adjusted and later the excess carbon dioxide and excess water are removed. This leaves a synthetic gas (syngas) that is reacted to in an iron or cobalt catalyst. The result is liquid hydrocarbons and other byproducts.

GTL process using Fischer-Tropsch process

The Mobile process converts the natural gas to a syngas, and then it converts the syngas to methanol.  It is then polymerized into alkanes over a zeolite catalyst.

Now that we’ve laid out what GTL is and how it works, next week’s blog post will look at where GTL is becoming a major market player as well as if and how GTL could carve a niche in the U.S. gas market.  Stay posted for Part II!

About Enerdynamics

Enerdynamics was formed in 1995 to meet the growing demand for timely, dynamic and effective business training in the gas and electric industries. Our comprehensive education programs are focused on teaching you and your employees the business of energy. And because we have a firm grasp of what's happening in our industry on both a national and international scale, we can help you make sense of a world that often makes no sense at all.
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