Synthetic Fuels: Past, Present and Future

Dr. Terry Mazanec

Velocys, Inc.

April 24, 2007 AIChE Spring Meeting

Agenda
1. Why Synthetic Fuels? 2. Microchannel Technology Primer 3. Past: Fischer & Tropsch 4. Present: Coal-to-Liquids, Gas-to-Liquids and R&D 5. Future: Biomass-to-Liquids, Waste-toLiquids

Why Synthetic Fuels?

Sustained high oil prices Makes alternatives more cost competitive

Concerns about

Drivers

Ensures future supply from alternative feedstocks

peak oil Can use domestic coal & biomass to meet US goal of 2.3 million bpd by 2017

Energy security

Infrastructure investment

Utilizes existing engines and fuel distribution infrastructure

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The New Oil

Synthetic Fuels
Liquid petroleum fuel replacements derived from alternative feedstock materials - Gas-to-Liquids (GTL) - Coal-to-liquids (CTL) - Biomass-to-liquids (BTL) - Waste-to-liquids (WTL) Processes have three key steps - Synthesis gas generation - Fischer-Tropsch Synthesis - Hydrocracking
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Microchannel Technology Primer

Microchannel Technology
Conventional

Microchannel vs Conventional Process Technology

Microchannel

~ 25-150 mm

Characteristic dimension

~ 0.11.0 mm
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Process Intensification
Velocys Reactor Microreactor

Short Residence Times Reaction rates 10 to 1000

times faster than conventional systems

0.1 1.0 mm 0.1 1.0 mm

10 to 100 times higher than in conventional reactors

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Microchannel Advantages
Sources of advantage depend on specific application and include
Reduced capital costs - Smaller facility footprint - Shorter deployment time Lower feedstock and operating costs Improved energy efficiency Reduced emissions and by-product formation Decreased downtime due to plant maintenance Modularity Inherently safer

The Past
Fischer & Tropsch

The Beginning

Fischer-Tropsch Process
Chemical reaction where syngas (carbon monoxide and hydrogen) is converted into liquid hydrocarbons Discovered at the Kaiser Wilhelm Institute in the 1920s, by Franz Fischer and Hans Tropsch

Professor Franz Fischer

Dr. Hans Tropsch

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First Commercial-scale Production

Used by coal-rich Germany and Japan during World War II to produce ersatz fuels
Germany's annual synthetic fuel production exceeded 124,000 barrels per day from 25 plants in 1944

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Modern Commercial-scale Production

In 1955, Sasol, South Africas petroleum company, used syn fuels production to meet energy needs during Apartheid
Process uses low-grade coal and Sasols high-temperature Fischer-Tropsch technology to produce a range of fuels and petrochemicals

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The Present
Coal-to-Liquids, Gas-to-Liquids and R&D

Synthetic Fuels Today

Installed capacity is approximately 200,000 barrels per day
SASOL coal-to-liquids plants are the largest

Many world-scale GTL plants have been announced or are being constructed
Sasol Chevron, Shell, Oryx

Development of improved, lower cost processes are underway

Technology companies, including Syntroleum and RenTech are also playing in the field Velocys microchannel SMR and FT reactors
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Current Syn Fuels Production

Company SASOL SASOL Petro SA Shell MDS Oryx Location South Africa South Africa South Africa Malaysia Qatar Total Size (bpd) 5,600 124,000 22,500 14,000 33,700 199,800
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Recent Developments
In the past few months, there have been lots of ups
December 16, 2006 A B-52 successfully completed a test flight using a blend of GTL and conventional JP-8 in all eight engines. The flight further demonstrated the Air Forces commitment to using alternate fuels January 29, 2007 - Oryx GTL plant in Qatar started up, it will produce 34,000 barrels per day of primarily synthetic diesel February 20, 2007 Syntroleum and Sinopec have signed a deal to produce GTL and CTL in China February 22, 2007 Qatar and Shell formally launched the Pearl GTL project to produce 140,000 barrels per day GTL

And a few downs

February 20, 2007 Qatar Petroleum and Exxon Mobil have decided not to progress their planned GTL project with an output of 154,000 barrels of synthetic fuels and chemicals April 3, 2007 First shipment of 30,000 tons of product from Oryx, the Sasol Qatar GTL plant, delayed due to logistics
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FT Advances at Velocys
FT catalyst and process development from 2001
Process In

Coolant In

FT pilot plant reactor began operating in early January Production rate: ~2 gallons/day
Coolant Out

Process Out

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Velocys FT Pilot Plant Reactor

Cross Flow Design
Partial Boiling Water Coolant Process length ~ 0.6 m Process microchannels = 40 Coolant Length ~ 0.3 m Coolant microchannels = 420

Nominal Capacity ~8 gal/day Successfully Successfully demonstrated for >1000 demonstrated for >1000 hours hours
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Velocys FT Pilot Plant Performance

Pinlet = 320 psig, Tave = 215C, H2:CO = 2:1, WHSV = 2 (CT=562ms)
100.0% 90.0%
Conversion of CO Selectivity to CH4

Conversion or Selectivity (%)

80.0% 70.0%
~500 hours of operation

60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 250

Gradual decline in conversion due to wax build-up on catalyst

375

500

625

750

874

999

1124

Time-on-Stream (hr)

Pilot plant was operated continuously for ~1200 hours Catalyst was regenerated
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Velocys vs. Conventional Fischer-Tropsch Processes

100
Limit of Slurry design

Liquid Selectivity, wt %

95 Design SMDS X Design SMDS II 90 Shell Bintulu design 85 Better Efficiency Lower Capex 80 0 500 1000 1500 2000
Limit of Shell Tubular design

Velocys MPT

Velocys Technology increases catalyst productivity by 8-fold

Productivity kg/m3/hr
* Source: Hoek, Shell, CatCon2003
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The Future
Gas-to-Liquids, Biomass-to-Liquids and Waste-to-Liquids

Two Scales of Operation

Mega-scale
GTL to monetize stranded reserves CTL to improve energy security Applies time tested strategy economies of scale

Smaller scale
Offshore GTL to monetize associated gas BTL and WTL opportunities Requires innovative process technology to be cost competitive
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Conventional GTL Technology

Steam Methane Reformer Capacity:
20 million standard cubic feet/day

Large Size:
~100 x ~100 x ~100

Capital Intensive Process

Conventional Technology
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Microchannel GTL Technology

Primary source of value is reduced size with same output
Microchannel Reformer Same capacity 90% size reduction 33% capital cost reduction 100% increase in profit margin

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Commercial Velocys FT Reactor Assembly

Coolant Out - Vapor

Specifications
Shell Diameter = ~1.25 m Shell Length = ~4 m Coolant flow length = ~0.6m

Repeating Units

Process flow length = ~0.6m

Process In Coolant In

Coolant Out - Liquid (under shell - not shown)

Process Out Steam trace

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Transportable Gas-to-Liquids Production Facility

Design Basis:
120,000 bbl/year Containerized modules Natural gas feedstock
Fired Feed Preheater Engine Generator Product Storage

Velocys FT
Boiler

Steam Turbine Generator

Heat Exchangers De-sulfurization

Velocys SMR

Water Treatment

Velocys is developing a novel synthetic fuel production technology Velocys is developing a novel synthetic fuel production technology that can be scaled to a range of applications that can be scaled to a range of applications 26

Conclusions
Synthetic fuels will be an important part of our energy future Two scales of production will dominate
Mega-scale Gas and coal to liquids Distributed Biomass and waste to liquids opportunities

Microchannel technology can enable lower cost, large and smaller-scale syn fuels production

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Contact Information
Terry Mazanec Senior Technical Program Manager mazanec@velocys.com

Velocys Inc. 7950 Corporate Blvd Plain City, OHIO 43064 USA Phone: 614/733-3300 Web: www.velocys.com

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