Economic Analysis

1. Fischer Tropsch Refinery: High Quality Transportation Fuels from Natural Gas Team: Mudassir Ali, Stephen Drake, Kevin Meaux, Brandon Sieve Mentor: Daniel Rusinak, Middough Engineers Motivation Economic Analysis Introduction • We have taken advantage of the arbitrage in energy markets, where energy in stranded natural gas is priced much lower than that in transportation fuels. • By the incorporation of new technologies such as exhaustive hydrocracking of wax and oligomerization of the light ends, the Fischer-Tropsch Refinery can now convert 80% of products to transportation fuels as compared to 25%, which come with excellent cold flow properties, high cetane ratings, and high octane ratings. • By refining modern technologies and incorporating a co-current reactor, the Fischer-Tropsch Refinery can now produce high quality transportation fuels for the future. The Fischer-Tropsch process utilizes a collection of chemical reactions to convert a mixture of hydrogen and carbon monoxide into liquid hydrocarbons. It has the capability of converting natural gas, coal, or biomass feedstocks into transportation fuels such gas as gasoline, jet, and diesel. These fuels are substantially higher in quality compared to fuels refined from crude oil and are more environmentally friendly. In the past decade, this process has become increasingly important because it is independent of the climbing price of crude oil.  Hydraulic fracturing for natural gas, when done properly, can be incredibly safe and has an excellent safety record. Conversely, the supply of easily extractable crude oil has been exhausted. Consequently, riskier methods of drilling have been adopted to obtain it. The Fischer-Tropsch Refinery will be built close to the Bakken formation in Williston, ND. In the United States, advances in horizontal drilling technologyhas resulted in the massive influx of natural gas from the Bakken formation. This has resulted in a 50% decrease in the wellhead price of natural gas since 2010. Unfortunately, a lack of processing infrastructure means that approximately 30% of this valuable resource is being flared off. A Fischer-Tropsch Refinery is capable of taking advantage of this cheap natural gas to produce high quality transportation fuels for the US market, without having to create a new national distribution infrastructure. • Syngas, Electricity, Boiler Feed Water and Steam are all some of the internal transferables which are being provided at no cost due to plant integration. • The Fischer-Tropsch Reactor, Hydrocracker, and Oligomerization Unit make up the bulk of the capital cost. ** www.eia.gov ** www.eia.gov ** Fischer Tropsch Refinery- Arno De Clerk *Total Income after taxes Shale gas complex • Expected simple payback period is 4.63 years. • Prices of natural gas are expected to decrease further, which will significantly shorten the payback period. • The Fischer-Tropsch Refinery is one of the nine plants of an integrated shale gas complex. • The Fischer-Tropsch Refinery is receiving the Syngas from the Syngas plant. Electricity, Steam, and Boiler Feed Water come from the CHP plantat no cost. • The purge is being sent out to the CHP plant to produce electricity and steam. The aqueous stream is being sent to the Water Treatment plant. Process Flow Diagram Design Basis/Block Flow Diagram Environmental Analysis • A high cetane rating increases the thermodynamic efficiency of a diesel engine, which reduces CO2 and CO emissions into the atmosphere. • Due to the absence of aromatics in the process, the resultant LPG, Diesel fuel, Jet fuel, and Naphtha are very clean. Absolutely no soot formation occurs in engines, which further reduces the CO2 and CO emissions into the environment. • Due to the absence of sulfur, there are no SOx emissions and no sulphuric acid droplets in the Tropopause. Therefore, no acid-gas mist formation occurs. Droplet and SOx accumulation in the Tropopause causes global cooling, thus interfering with the global climate.