Gas-to-liquids: the economics?

This data-file captures the economics of gas-to-liquids, including the formation of syngas in an auto-thermal reformer, then the subsequent upgrading into liquids via the Fischer-Tropsch reaction.

Our base case is that $100/bbl realizations are required for a 10% IRR. You can stress-test the economics as a function of gas prices, capex costs, thermal efficiencies, carbon intensity, CO2 prices and other operating costs.

Our inputs for each of the categories above are substantiated by collating data-points from past projects and technical papers. Finally, our notes and review of GTL patents are outlined in the final tabs.

US Shale Gas to Liquids?

We have reviewed 40 of Shell’s GTL patent filings for 2018. They show continued progress, innovating new fuels, lubricants, renewable-heavy gasolines, waxes and detergents. Each patent is summarised and categorized in this data-file.

All of this begs the question whether there is a commercial rationale for a US replica of the Pearl GTL project, to handle the over-abundance of gas emanating from the Permian; and produce these advantaged products. It would also help reduce the risk of US LNG projects glutting the market.

We therefore model the economics in this data-file, using prior project disclosures and our learnings from the patent history. Our base case IRR is 11%, taking in 1.6bcfd of shale gas as feedstock. Resiliency is tested at varying oil and gas prices.

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