US Siluria attracts Aramco as investor

Interview story by Al Greenwood

HOUSTON (ICIS)–Siluria Technologies has attracted energy giant Saudi Aramco as an investor, placing the company on target to raise $50m during its current funding round, the company said on Wednesday.

The round was led by Aramco’s venture investment subsidiary, Saudi Aramco Energy Ventures (SAEV), Siluria said. The total raised for this initial close of the funding round was $30m.

The money raised will allow Siluria to continue commercialising its technology, said Ed Dineen, Siluria CEO.

The company is developing technology that converts methane into ethylene using oxidative coupling. A new catalyst technology is making the process practical.

The ethylene could then be converted into polyethylene (PE) or other petrochemicals or it can be used to make fuels.

Saudi Aramco’s investment marks a milestone for the company, Dineen said.

“Up to this point, the company has been backed by very strong financial players,” he said.

For this latest funding round, Siluria wanted to raise the money through strategic interests, and Saudi Aramco fit that description, he said.

“This is obviously strategic money with a lot of hydrocarbon resources, a lot of industrial organisational capability,” Dineen said. “Linked with that investment is a joint effort to commercialise the technology.”

For Saudi Aramco, the technology could provide it with another way to make money from its natural gas, Dineen said.

Saudi Aramco will be joining Siluria’s board, and a joint team will be looking at commercialising the company’s technology in Saudi Arabia, Dineen said. 

If Siluria can successfully develop the technology, this could mark a potential game changer for the Middle East.

As feedstock, the region’s petrochemical industry has relied on natural gas liquids (NGLs) extracted from associated gas. Those easy NGLs are close to exhausted.

While the Middle East has substantial reserves of natural gas, much of it is dry gas, and it lacks NGLs.

Siluria’s technology has the potential to turn this dry gas into petrochemicals.

Saudi Aramco is the latest company to show interest in Siluria’s technology.

Earlier this year, Siluria reached a licensing deal with Linde.

The company is also building a demonstration plant at Braskem’s site in La Porte, Texas. The plant is on track to start production by the end of this year.

Possible uses of Siluria’s technology go beyond providing a low-cost source of ethylene.

Ethylene producers could use it to increase feedstock flexibility.

Smaller methane-to-ethylene units could be built to convert gas that is currently being flared from oil wells. Companies could then use existing technology to covert the ethylene into fuels.

Midstream companies that process natural gas are also potential users of the technology.

“Our two top business priorities right now are ethylene and gas processing or the midstream industry,” Dineen said.

“We’re looking to form partnerships in that arena, and we have two companies we are working very closely with,” he said. Something could develop in the second half of the year.

The company is still targeting a 2017 or 2018 date for commercial production of ethylene, Dineen said.

For the ethylene-to-fuels portion of the business, Siluria has signed an agreement with an unnamed global engineering, procurement and construction (EPC) company, he said.

The process at the centre of Siluria’s technology is oxidative coupling.

For decades, oxidative coupling of methane remained impractical because a high temperature is required before the desired reaction could take place.

To solve this problem, Siluria has employed a novel process – developed by Massachusetts Institute of Technology (MIT) professor Angela Belcher – that uses viruses as a design tool to create a biological template for nanowire catalysts.

To quickly identify the best-performing catalyst, Siluria has developed a process of high-throughput screening. The combination of screening, nanowires and biological templates allowed Siluria to find and develop a catalyst that could make oxidative coupling a practical way to produce ethylene from methane.

The catalyst has lowered the reaction temperature, which eliminates the need for expensive metallurgy. Plus, the reaction is exothermic, providing a production site with additional energy.

The availability of the catalyst is not an issue, since Siluria is making hundreds of kilograms, the company said.

Oxidative coupling is still viable in the US despite the nation’s abundance of ethane as a cracking feedstock, Siluria said. The advent of shale gas has also made an abundance of methane available to producers.

Plus, an alternative to ethane could help ethylene producers avoid spikes in the feedstock. Typically, chemical producers are eager for feedstock flexibility.

Also, methane pricing is also more stable and can be hedged, unlike ethane.

For regions with stranded methane, oxidative coupling could give producers one more tool for adding value to natural gas.