LONDON: Environmentally-motivated restrictions on flaring off unwanted gas at oil wells are gathering strength and have the potential to stop new projects in their tracks, but a solution may be at hand.
Flaring at sites worldwide burns enough gas to satisfy a quarter of US demand and puts 400 million tons of CO2 - 1.2 percent of emissions into the atmosphere every year, according to the World Bank-funded Global Gas Flaring Reduction partnership (GGFR).
Oil companies are coming under increasing pressure from governments and environmentalists to end the practice and World Bank resistance to flaring and venting - the release of unburned gas into the atmosphere - is particularly effective in new discovery hotspot Africa, where developers need its backing.
Now engineers believe they have succeeded in miniaturising the process that changes gas to liquid (GTL), marking a major leap forward in a technology whose economics have so far depended on massive scale.
Royal Dutch/Shell's Pearl GTL plant in Qatar occupies a site the size of London's Hyde Park to make gas into diesel and other refined products, but a miniature GTL converter would sit on a drillship and turn so-called associated gas into synthetic crude to be mixed with naturally occurring oil.
Privately-owned CompactGTL, took a step this week towards getting the first functioning offshore mini-GTL plant on to a working drillship.
Its prototype module, parked on a Brazilian beach, has been operating for 20 months using gas supplied by Petrobras .
It operates without flames, does not require an oxygen supply, and uses only small volumes of fluids in a shipping container-sized device designed to work aboard the floating production storage and offtake (FPSO) vessels that are widely used in modern offshore oil projects.
SBM Offshore, the world's biggest supplier of leased FPSOs, on Wednesday announced a tie-up with CompactGTL.
"This agreement opens the door for the world's first, fully integrated, offshore modular GTL solution for the upstream industry," Netherlands-based SBM said in a statement.
CompactGTL's Director of Business Development, Iain Baxter, said he has six potential customers signed up for feasibility studies, all household names in the international oil industry.
Petrobras and Gazprom are the only two he will name.
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