Gas to liquid (GTL) technology; disruptive change is coming!

Gas to liquid (GTL) technology; disruptive change is coming!

Natural gas and natural gas liquids represent advantaged feedstocks for a wide range of high value chemicals and fuels. The growing natural gas abundance coupled with low pricing has spurred companies to take a fresh look at gas to liquid conversion technologies. The timing is just right for a radical change. With a game changing approach in mind, Pangaea completed an investment in Calysta Energy, a company innovating the next generation of GTL technology based on disruptive bioconversion.

Calysta Energy is engineering a direct biological conversion route for fuels and chemicals. Calysta’s feedstocks include natural gas and natural gas liquids that are converted by biocatalytic and fermentation processes facilitated by genetically engineered methanotrophic (methane-consuming) microbes. These microorganisms metabolize carbon directly from methane rather than from sugars or other biomass. Calysta has identified a range of target products based on various building block chemicals and fuels in large markets. The innovative approach has already captured the attention of companies working with biobased feedstocks. NatureWorks signed a joint development agreement with Calysta to produce lactic acid from methane sources, eying a diversified pathway to its Ingeo™ product.

Conventional natural gas to liquid conversion is big business dominated by big companies. These plants are very expensive. Recently, Sasol announced a $16 to $21 billion plant to be built in Louisiana. Meanwhile Shell completed a plant in Qatar costing over $19 billion, but recently pulled back on spending $20 billion for a similar facility slated for Louisiana. GTL as we know it today got its start when Fischer and Tropsch (1922) used an iron-based catalyst to convert a mix of hydrogen and carbon monoxide (a mixture commonly referred to as syngas) to hydrocarbons and oxygenated compounds. The South African company, Sasol, took this a step further in conjunction with coal gasification to make hydrocarbons. Shell then showed that natural gas (NG) could be converted to fuels and waxes via syngas. Today, methane or natural gas is converted into syngas via steam reforming and/or partial oxidation techniques. Metal (cobalt, iron) catalysts facilitate the conversion of syngas into hydrocarbons that are separated, upgraded and hydrocracked into various chemicals. There are differences in reforming techniques, plant design (for example, fixed bed vs. fluidized bed) and catalyst materials. Products include diesel, kerosene, naphtha and base oils. Over the years, companies have introduced incremental advances in conventional GTL processing, such as, more efficient catalysts including nanoscale materials, process design and mobile small form systems. But major issues relating to high capital, operating, and catalyst costs together with environmental and efficiency challenges continue to limit widespread adoption. In particular, the capital intensity and large operating scale prohibits access to the majority of available sources of gas, since very few geographical locations can support the sheer volume of gas required to feed a 100,000 BPD plant at economics sufficient to pay back the huge capital investment.

Biological gas conversion is ushering in a new age in sustainable natural gas and natural gas liquids to fuels and chemicals. It is a radical process shift with significant potential and wide capabilities. Cheaper natural gas and natural gas liquids feedstock can be converted into standard commodity chemicals, differentiated commodities and specialty chemicals. In addition to Calysta Energy’s direct conversion approach, other direct routes include catalytic oxidative coupling and a mix of catalytic technologies. BioProtein AS of Norway earlier validated the methane bioconversion approach with their successful scaled-up manufacturing of protein feed from natural gas via fermentation with natural microbial strains. Companies and academic groups are also developing indirect approaches based on syngas fermentation and synthesis of oxygenates, such as, methanol and formaldehyde.

Importantly, bioconversion operates at essentially ambient temperatures and pressures, greatly reducing the capital intensity of the process. This feature enables small-scale and modular systems, opening up exciting new possibilities compared to traditional GTL technology. Stranded gas, flared gas and biogas conversion can be now accessed in a capital efficient manner, with unique site-specific advantages. It has been estimated that less than 10% of oilfields are able to support large scale GTL as practiced today. But 40% of gas fields are possible with smaller systems in the range of 2,000 bpd. The biological route via methanotrophic microbes has both advantages and challenges. High carbon conversion efficiency is coupled with enzyme selectivity at low temperature and pressure process conditions that are scalable. The energy content of natural gas is significantly higher than that of glucose, leading to significant economic advantage on an energy basis at current pricing of natural gas and sugars. However, gas fermentation presents new challenges including microbial durability, energy losses in conversion, scale-up and low volumetric productivity.

Recently, ARPA-E got into the act to help address the challenges. The agency provided $34 million in funding to support transformational biological techniques to convert natural gas into liquid fuels for transportation. 15 grants were provided to universities and companies, including Calysta Energy, for development of biological methane activation, biological synthesis of transportation fuels and process intensification for biological methane conversion.

I expect that there will be surge of activity in exploring novel methods for natural gas and natural gas liquids transformation to fuels and chemicals. Established corporations, startup companies, academia and government will all ramp up activities in biological conversion as it presents a sustainable alternative approach for gas to liquid conversion. There is still much to be done, but we believe that the promise of success represents a massive upside in developing methane reserves around the world. Importantly, this field is still in the early stages and the smart choice is to jump in early and help build the next-generation technology.

General Partner, Pangaea Ventures Ltd. Purnesh has worked with advanced materials for over 25 years, directly involved with clean technologies, nanotechnology, semi-conductors, thin films and coatings, catalysts, powder metallurgy, and manufacturing technologies.View Purnesh Seegopaul's profile on LinkedIn

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