Economics of GTL Plants

Abstract A unique approach for assessing the economic viability of gas to liquid (GTL) plants is utilized. The capital expenditures ("CAPEX") are based on the production of one barrel of hydrocarbon liquid per day (BLPD) whereas the annual operating expenditures ("OPEX") are expressed as percentages of CAPEX. Both expenditures cover the range of costs envisioned by various venders/investigators. It is assumed the overall thermal efficiency of GTL plants is about 60% and the plant operates 330 days per annum. The capital expenditures utilized in this study are 20,000, 25,000, 30,000, 35,000, and 40,000 USD/BLPD. The annual operating expenditures utilized are 5%, 6%, and 7% of CAPEX. Thus, the range of operating expenditures utilized is 3.03 to 8.48 USD per barrel of liquid hydrocarbon produced. Two measures of profitability are utilized in assessing the economic viability of GTL plants, namely, rate of return ("ROR") and undiscounted pay-out time ("POT"). Rates of return used in this study are 10%, 15%, and 20% whereas payout times used are 4, 5, 6, 7, and 8 years. Construction periods of 3 and 4 years are considered in the analysis. It is determined, for a 3-year construction period, that when crude oil prices are in the range of 10.27 USD/Bbl (for 20,000 USD/BLPD in CAPEX, 3.03 USD/Bbl in OPEX, and 10% for ROR) and 37.76 USD/Bbl (for 40,000 USD/BLPD in CAPEX, 8.48 USD/Bbl in OPEX and 20% for ROR), GTL plants are profitable. Likewise, it is concluded that when crude oil prices are in the range of 10.48 USD/Bbl (for 20,000 USD/BLPD in CAPEX, 3.03 USD/Bbl in OPEX, and 8 years for POT) and 38.32 USD/Bbl (for 40,000 USD/BLPD in CAPEX, 8.48 USD/Bbl in OPEX, and 4 years for POT), GTL plants are profitable. For a 4-year construction period, crude oil prices range between 10.64 and 40.87 USD/Bbl rather than 10.27 and 37.76 USD/Bbl, respectively. Crude oil prices as function of undiscounted pay-out times, however, remain unaffected by the change in the construction period. It should be noted that it is assumed the premium on GTL products offsets the cost of feed stock gas. A general survey of GTL processes is also included.