US Siluria starts ethylene-to-fuel pilot plant

Interview story by Al Greenwood

HOUSTON (ICIS)–Siluria held on Thursday a grand opening for a pilot plant that uses a unique two-step process that converts methane into gasoline, a technology that could lower the typically high costs of gas-to-liquids production, the CEO said.

Siluria uses a process distinct from the Fischer-Tropsch technology typically associated with producing fuel from methane, said Ed Dineen, CEO. “We do it in a much more direct and efficient way.”

Under Fischer-Tropsch, methane is converted into synthesis gas (syngas), a mixture of carbon monoxide (CO) and hydrogen gas.

The syngas then enters a Fischer-Tropsch reactor where it is converted into hydrocarbons. These are then further processed to produce fuel.

These gas-to-liquids complexes are expensive to build because the Fischer-Tropsch reaction takes place at high pressure and temperature, according to the US Energy Information Administration (EIA). To be profitable, large-scale plants need oil prices to be several multiples above those for natural gas.

Sasol is considering building such a plant in Louisiana. For it to be profitable, ICIS estimates that oil prices would have to exceed those for natural gas by at least 16 times.

Shell, in fact, backed out of plans to build its own $12.5bn gas-to-liquids plant in Louisiana because of the uncertainty of oil and natural gas prices − as well as high costs.

For smaller scale Fischer-Tropsch plants, they cannot even be profitable by producing liquid fuels, according to the EIA. Instead, these smaller plants have to produce waxes if they want to be profitable.

Siluria expects to avoid high capital costs by relying on different processes.

Instead of producing syngas from methane, Siluria is producing ethylene from methane, using its oxidative coupling process.

The reaction is exothermic, so Siluria can use the heat for other units, lowering overall operating costs.

And instead of producing synthetic crude from syngas, Siluria is producing fuels from ethylene. The company can produce gasoline or diesel by altering the conditions of the reaction.

“On the front end, in the middle piece and in the back end, it is much more efficient,” Dineen said.

Because Siluria’s gas-to-liquids technology is so different from Fischer-Tropsch, Dineen estimates that its operating costs will be about $15/bbl, excluding gas.

Capital costs for a Siluria complex should be 25-30% lower than for Fischer-Tropsch, he said.

The process that is making Siluria’s methane-to-fuels technology possible is oxidative coupling.

For decades, it has remained impractical because a high temperature was 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.

The resulting catalysts are about 100 times more active and efficient than previous ones that were considered for oxidative coupling.

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. 

For ethylene production, Siluria’s technology will have a competitive advantage over naphtha cracking as long as oil prices are at least eight times higher than natural gas.

So far, Siluria has already produced the catalyst and successfully outsourced it to other companies, which can now make large batches of the materials.

The company has started building a demonstration plant that will run the oxidative coupling reaction. This plant will be at Braskem’s complex in La Porte, Texas. Production could start in the fourth quarter of 2014.

The Hayward plant is the final piece of completing the scale-up of Siluria’s technology, Dineen said.

Looking ahead, Siluria is now having discussions about starting feasibility studies with companies in the ethylene and the gas-processing industries.

If those feasibility studies are encouraging, then front-end engineering and design (FEED) could start by the third quarter of this year. The engineering design would overlap with the start-up of the demonstration unit.

By the first half of 2015, capital could be committed for the first commercial-scale plants, he said.

Because Siluria can use modular construction to build its ethylene units, operations could start in two years or less, Dineen said. That could put start startup for ethylene and fuels production in the middle of 2017.

Siluria’s ethylene technology fits well with the existing US gas-processing plants, Dineen said. The system these plants use to recover natural gas liquids (NGLs) is what Siluria needs to purify its products.

Siluria’s technology would allow these processing plants to add value to its natural-gas production.

“We see a great fit to incorporate the technology into an existing gas processing plant,” Dineen said.

Ethylene producers could also use the process to increase feedstock flexibility.

Siluria’s methane to fuel technology could help producers convert stranded gas into a product that could be shipped from a remote spot.

Often, gas is produced at sites at are isolated from pipelines that could bring it to consumers. Such gas is typically flared or re-injected into wells.

Dineen estimates that 30-35% of the world’s gas production is under-utilised. “Having a technology that could take that wasted resource and convert it into valuable products should be an interest to everyone.”