Natural gas without access to the world market, known as associated gas, is both a challenge and an opportunity. Due to ever stricter flaring regulations, associated natural gas is typically seen as a cost of oil exploration and production because of the capital equipment and energy required to re-inject the gas back into the reservoir. The cost of associated gas is highest offshore, where drilling wells and installing equipment are more expensive, and deck space is at a premium. The opportunity lies in the ability to monetize the natural gas through a Fischer-Tropsch gas-to-liquids (GTL) process enabled by microchannel technology; thereby, transforming the burden of stranded gas into a valuable resource that increases revenues and stretches reserves. The GTL application is a tremendous opportunity as over 150 billion cubic meters of natural gas are flared annually, while a substantial additional quantity is re-injected. The flared natural gas represents 5.5% of the world's annual production, and would be valued at $40 billion if it were delivered to the market. This level of flaring also needlessly adds approximately 375 million tonnes of CO2 per year to the atmosphere.

The vision of utilizing offshore natural gas to produce high value fuels has been around for years, but a number of factors, including the limitations of conventional processing hardware operating in the offshore environment, have prevented implementation. The primary challenges of operating a GTL process offshore are: 1) the ability to withstand high-intensity wave motion, 2) equipment size and weight, and 3) freshwater consumption. The wave motion experienced by floating production, storage and offloading (FPSO) vessels can cause havoc with process equipment, especially vessels with a high center of gravity or large liquid volume. Modular, low profile microchannel technology steam methane reforming (SMR) and Fischer-Tropsch reactor units can alleviate this concern by performing reactions rapidly in thousands of parallel channels; thus, minimizing reactor inventory and susceptibility to wave moments.

The compact nature and other aspects of microchannel technology make this approach especially attractive for offshore operations. The process intensification possible with microchannel process technology improves volumetric productivity and efficiency, reducing capital cost and shrinking facility footprints. Also, the low process water requirement of microchannel-based process flow sheet minimizes the need for desalination. All of these advantages result in a more cost effective offshore synthetic fuels process.

Sustained high oil prices, concerns about ‘peak oil', and the push for cleaner transportation fuels have intensified interest in alternative fuels, including those made with Fischer-Tropsch based synthetic fuel processes. To address this global trend, Velocys, Toyo Engineering and MODEC are developing a microchannel based synthetic fuels process specifically for offshore applications. This presentation will discuss the status of the technology and specifics about commercial FPSO installations.