June 2015

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1

Minimizing associated gas flaring with smaller

scale methanol production

Esben Sorensen, Haldor Topsoe Inc.

EFI Gas Flare Reduction & Monetization Forum; Denver Marriott City Center

Denver, Colorado; 15 – 17 June 2015

Haldor Topsoe Company

• Established in 1940 by Dr. Haldor Topsoe. Private 100% family owned company

• Global market leader in heterogeneous catalysis with a 75 year long track record

• 2,700 employees (2015) in 11 countries across five continents.

• HQ in Lyngby, Denmark, with regional offices in Houston TX, India, China, Russia, Bahrain, Malaysia, South Africa, Brazil and Argentina

• Three key operating business units: Chemicals, Environmental, and Refinery. A fourth unit, New Business Unit, focused on developing new technologies

• Revenue about $1 billion (2014).

• Founded on the belief that applied fundamental research is key to build and retain a leading position in catalysis

• Close to 10% of revenues annually applied to support R&D efforts

• Basic research and catalyst development done by 300+ world class scientists

Active phase Pore structure Catalyst Reactor

Services:

• Catalysts

• Technology/licensing

• Engineering

• Hardware

Catalyst manufacturing plants:

• Frederikssund, Denmark

• Houston, Texas

• Future: China, Brazil

3

Research and

development

Technology

Catalysts

Technology Licensing

Catalyst & HW sale

The Topsoe Philosophy

Client

~10% of revenue spent on R&D

NG flaring world wide and in North Dakota

ND Flaring rate in August 2014: 28% or 375 MM SCFD ( ̴ 18,000 MTPD MeOH)

World wide flaring rate 2011: 1̴4,300 MM SCFD (World Bank Estimate)

http://skytruth.org/viirs/

The Challenge

“The corporate world in itself means nothing

unless it improves the lives of people and

the conditions in poor countries.”

Haldor Topsøe

• How do we preserve the value of the NG in

a transportable form at lowest cost?

• Produce a valuable commodity product

• Match available resources

• Proven technology

• Low OPEX and CAPEX

If we can reduce gas flaring in North

Dakota, we may be able to use the

same approach world wide

Gas flaring in ND

• Time period: Jan 2012 – July 2014

• No. of registered wells: 9,395

• GPS coordinates

• Monthly flaring data: SCFM + number of days in operation

• Twenty most promising wells analyzed

• Average production: 0.9 MM SCFD

• 45 STPD MeOH per well

(conservative estimate)

Typical Methanol production cost (OPEX+CAPEX) Natural Gas as feed stock

Minimum continuous rate to ensure profitability: 40 MM SCFD NG ̴25 MM SCFD associated gas due to lower cost and higher LHV

Typical Flare Rates – large wells in N.D

0

500

1000

1500

2000

2500

14/09/2011 01/04/2012 18/10/2012 06/05/2013 22/11/2013 10/06/2014 27/12/2014

Nm

3/h

fla

red

gas

Date

Well no. 1

Well no. 2

Well no. 3

Well no. 4

Conversion of associated gas to methanol or gasoline

• Time period: Jan 2012 – July 2014

• No. of registered wells: 9,395

• GPS coordinates

• Monthly flaring data: SCFM + number of days in operation

• Twenty most promising wells analyzed

• Average production: 0.9 MM SCFD

• 45 STPD MeOH per well

(conservative estimate)

• Stable assoc. gas supply required

• Minimum 15 years

• About 25 MM SCFD (1400 STPD MeOH or 4,000 bpd gasoline)

• Combining of gas sources is required

Options available

• Pipe-line for transportation of associated gas

• Expensive, does not match NG-specifications and risk of liquid drop-out

• LNG

• Very expensive in small scale, transportation issues (cost & efficiency)

• Petrochemicals production

• NH3 (complicated)

• Methanol (possibly as intermediate product)

• Diesel (complicated)

• DME (not yet a commodity product, requires pressurized transportation)

• Gasoline (complicated but with good market fit)

• High levels of sulfur in gas may necessitate presulfurization option for WSA

production

Options available

• Pipe-line for transportation of associated gas

• Expensive, does not match NG-specifications and risk of liquid drop-out

• LNG

• Very expensive in small scale, transportation issues (cost & efficiency)

• Petrochemicals production

• NH3 (complicated)

• Methanol (possibly as intermediate product)

• Precursor for gasoline, formaldehyde, acetic acid, DME a.o.

• Minimize scope at gas site

• 3 x 8 MMSCFD sites instead of 1 x 25 MM SCFD site

• Diesel (complicated)

• DME (not yet a commodity product, requires pressurized transporation)

• Gasoline (complicated but with good market fit)

Topsoe’s methanol strategy

• The attractiveness of upgrading syngas

into methanol for use as a

transportation fuel or in chemical

production is increasing around the

world.

• Our methanol solutions can be

integrated with other processes to

enable feedstock and co-production

flexibility.

• Ensure reliable operation, extremely

high energy efficiency, and superior

conversion levels.

• Help achieve the best economic

performance for customers, in both the

short and long term.

Haldor Topsoe methanol products timeline

SMK

One-step

reforming

1st

methanol

plant

1969

MK-101

1986

Two-step

reforming

1996

Standard

co-

production.

1999

3,000

MTPD

plant

2003

5000

MTPD

plant

MK-151

FENCETM

2009

Flexible

co-

production

2014

MK-121

2000 1992

Boiling

water

reactor

------- Technology -------

------- Catalyst -------

ATR

Syngas for methanol production

• Key specification of syngas

• M=(H2–CO2)/(CO+CO2)

• must be close to 2

• High CO/CO2 ratio desirable

• Low CH4 content

Selection of syngas technology for methanol

NG as feed stock S/C H2/CO CO2 CH4

SMR (one-step reforming) Conventional tubular reforming

2-3

4-5

High

Medium

Two-step reforming Combined tubular and oxygen-blown

secondary reforming

1.5-1.8

~3

Medium

Low

ATR reforming Stand-alone oxygen-blown reformer

0.6

2.3

Low

Low

Conclusion: SMR is today not attractive for methanol production from NG

Technology comparison – NG as feed stock

5,000 MTPD MeOH plant Two-step reforming ATR

Energy consumption, including

oxygen, MM BTU/MT MeOH 27.6 27.3

ISBL cost including ASU 100 91

Catalyst cost 100 95

Oxygen consumption 100 145

Reforming section duty 100 34

S/C ratio 1.8 0.6

CO/CO2 in synthesis gas 3.0 5.4

Methanol production by ATR

Oxygen/steam

Steam Steam

Natural gas

Purge

gas Hydrogen

recovery

Methanol

reactor

Autothermal

reformer

Hydro-

genator

Sulfur

removal

Pre-

reformer

Make-up

comp.

Rec.

comp.

Raw methanol

ATR vs. SMR for associated gas

• Autothermal reforming of associated gas with AGR

• Tref=1880oF, Pref=470 psi, S/C=0.6

• M=1.97; CO/CO2=9.6, CH4=1.0%

• Steam reforming of associated gas

• Tref=1560oF, Pref=350 psi, S/C=2.5

• M=2.4; CO/CO2=1.6, CH4=4.9%

• Autothermal reforming of associated gas with AGR

• Steam reforming of associated gas

Economic Analysis of a specific case

• Procedure

• Detailed PFD’s

• One-line specifications for all process equipment

• US Gulf coast ISBL cost estimate (+/- 30%)

• OSBL cost from empiric data

• CAPEX from amortization of TIC

• Benchmarking towards MeOH from NG using ATR-based methanol production

Autothermal reforming of associated gas:

Impact of feed stock and scale on production price

Typical methanol production costs

Feed stock / Process Capacity CAPEX 1)

USD/ST

OPEX

USD/ST

Sum

USD/ST

Natural Gas / ATR 5,000 MTPD 73 56 2) 129

Associated Gas / ATR 430 STPD 196 0 196

Associated Gas / ATR 1400 STPD 140 3) 0 140

1) Incl. insurance & utilities etc. and assuming OSBL-cost = ISBL-cost and

ROI=12%. Exchange rate: 1 Euro = 1.10 USD

2) Assuming 2.5$/MM BTU as NG cost

3) Assuming a cost scaling factor of 0.72

Cost estimates are from 2013; actual costs depend on S-content in gas (max

100 ppm)

• Conversion of associated gas to petrochemicals is an attractive way to

reduce gas flaring

• Combining of gas sources is required to reach an attractive production

scale – minimum 25 MMSCFD for 15 years

• A company such as Haldor Topsoe can provide all the required

technology

• Infra-structure must be built to support this initiative

Conclusions

Thank you for your attention

Our values:

Business: We go the extra mile to create lasting

value for our customers.

Science: Our passion for science and innovation

strengthens our business.

People: Topsoe is a great place to work and to

have worked.

Society: We create sustainable solutions that

make a difference to the world of today – and

tomorrow.