Follow this blog:
RSS

Shell spends $19 billion to convert natural gas to clean diesel

By | April 19, 2010, 7:54 AM PDT

Royal Dutch Shell is putting the finishing touches on a $19 billion plant in Qatar that will convert the area’s abundant natural gas reserves into an odorless diesel, according to a new report.

The Wall Street Journal calls the move “one of the most expensive gambles on clean fuel in the history of the energy industry.”

Named “Pearl GTL,” the project is, in part, a way for the company to flex its corporate muscles and show its rivals that it can handle massive, complicated projects — and potentially make a ton of money from them.

The reason? Oversupply of natural gas has pushed its price down considerably. If Shell can develop a sustainable way to turn gas into oil products, that will be much more attractive than crude, currently selling at more than $80 a barrel.

The plant is set to begin production next year, and is the latest step in major oil companies’ attempts to make lemonade out of lemons. Blocked from easily accessible crude in the Middle East, companies are looking for alternative oil locations (Alberta, Canada and North Dakota) and new technologies, such as algae-derived biofuels.

Shell’s new gas-to-liquids, or GTL, plant uses chemical reactions to change the composition of gas molecules. The process yields an odorless, colorles, diesel-like “clean” fuel.

A major hurdle is that GTL requires massive amounts of energy to make the conversion — two steps forward, one step back, if you will.

Worse, critics say the technology isn’t really a good solution in most locations.

Start your week smarter with our weekly e-mail newsletter. It's your cheat sheet for good ideas. Get it.

Andrew Nusca

About Andrew Nusca

Andrew Nusca is the editor of SmartPlanet.

Andrew Nusca

Andrew Nusca

Editor

Andrew Nusca is editor of SmartPlanet and an associate editor for ZDNet. Previously, he worked at Money, Men's Vogue and Popular Mechanics magazines. He holds degrees from the Columbia University Graduate School of Journalism and New York University. He based in New York but resides in Philadelphia.

Follow him on Twitter.

Andrew Nusca

Andrew Nusca
Andrew Nusca does not hold any investments in the companies he covers.
If you liked this, don't miss...
2
Comments

Join the conversation!

Follow via:
RSS
0 Votes
+ -
RE: Shell spends $19 billion to convert natural gas to clean diesel
Its ironic, given the header " ... natural gas to clean Diesel", that a number of public transit agencies have converted buses from dirty Diesel to clean natural gas.

The idea of reforming natural gas into carbon monoxide and hydrogen, followed by synthesis with the aid of a catalyst, is already being used to produce billions of gallons of methanol every year at giant facilities like Methanex's Trinidad facility, where NG is available at a favorable price. From what I understand, middle east nations which have substantial natural gas resources, have also been into producing methanol for world markets.

The combination of hydrogen and carbon monoxide is like the proverbial magician's hat. You can get anything out of it you want, if you use the right catalyst and reaction conditions. So its normal that Shell and other firms, invest capital in production facilities to produce Diesel fuel, jet fuel, and chemicals using NG as the basic raw material.

You could liquify natural gas and ship it from where its available in abundance to where its in demand, then use it directly for applications such as transit buses. But liquids like clean Diesel or jet fuel, are easier to transport on ships than LNG. So that at least partially makes up for the inefficiency of the NG to liquid fuel Fischer-Tropsh synthesis process.

What I'd like to see, is some way by which one could attach an oxygen atom to methane for direct conversion to methanol. That would open up an entirely new path for monetarization of natural gas in remote locations.
Posted by AlexKovnat
19th Apr 2010
0 Votes
+ -
RE: Shell spends $19 billion to convert natural gas to clean diesel
What a waste!! Esp. since the trend is to run vehicles on gas and electricity. Not to mention burn gas vs. coal in power stations!
Posted by israelgreen
23rd Apr 2010
Join the conversation
Formatting +
BB Codes - Note: HTML is not supported in forums
  • [b] Bold [/b]
  • [i] Italic [/i]
  • [u] Underline [/u]
  • [s] Strikethrough [/s]
  • [q] "Quote" [/q]
  • [ol][*] 1. Ordered List [/ol]
  • [ul][*] · Unordered List [/ul]
  • [pre] Preformat [/pre]
  • [quote] "Blockquote" [/quote]

Join the SmartPlanet community and join the conversation! Signing up is fast and free. Don't wait -- we want to hear your opinion!