Evaluation of the Economic Potentials of a Mini Gas-to-Liquids (GTL) Plant in Nigeria

Ubanozie Julian Obibuike; Stanley Toochukwu Ekwueme; Chinelo Iruamaka Abanobi; Remmy Chindu Eluagu; Anthony Chemazu Igbojionu

doi:doi:10.11648/j.ogce.20210906.13

Evaluation of the Economic Potentials of a Mini Gas-to-Liquids (GTL) Plant in Nigeria

Ubanozie Julian Obibuike, Stanley Toochukwu Ekwueme, Chinelo Iruamaka Abanobi, Remmy Chindu Eluagu, Anthony Chemazu Igbojionu

Published in International Journal of Oil, Gas and Coal Engineering (Volume 9, Issue 6)

Received: 11 November 2021 Accepted: 3 December 2021 Published: 29 December 2021

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Abstract

In this paper, the economic potential of using a mini gas-to-liquids (GTL) plant for monetization of stranded associated gas in Nigeria was extensively evaluated. Feedstock to the plant comprises 50 MMscfd of treated stranded associated gas from Assa North in the Niger Delta region of Nigeria. 5000 b/d of GTL diesel product was realized after simulation using Fischer-Tropsch (FT) type modular gas-to-liquids technology. Economic analyses were performed for a wide range of economic conditions to determine the economic potentials of the GTL project. From the result, it was realized that for base case, the net present value (NPV) of the project was US$32,421 barrel-liquid-per-day (BLPD) corresponding to US$162.1 million for 5000 b/d of GTL diesel produced. The payout time (POT) was 4.48 years while the net cash ratio (NCR) was US$81.83 million. The internal rate of return (IRR) was 22.2%. From the sensitivity analyses performed, it was realized that the variable having the most influence on the NPV was the GTL product price (the price of diesel) followed by the capital cost of the GTL plant and then the natural gas price. It was also realized that the operating cost of the plant has the least (negligible) effect on the NPV of the project. Furthermore, it was realized that GTL project remained profitable for diesel prices above US$80/bbl as long as the price of natural gas was maintained below US$2.2/Mscf at 15% discount rates. In general, it was realized that the mini-GTL project was profitable for diesel prices equal to or greater than US$80/bbl as long as discount rates remained below 20% for base CAPEX and OPEX. It was recommended that the government of Nigeria subsidizes the price of natural gas to increase the profitability of mini-GTL projects creating a greater participation by the private investors and thereby reducing the volume of associated gas flared.

Published in	International Journal of Oil, Gas and Coal Engineering (Volume 9, Issue 6)
DOI	10.11648/j.ogce.20210906.13
Page(s)	98-110
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2021. Published by Science Publishing Group

Keywords

Gas-to-Liquids, Stranded Gas, Barrel-liquid-per-day, Fischer-Tropsch, Economic Analyses

References

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[3]	Ekejiuba, A. I. B., (2017). Real-Time Monetization of the Flare Associated Stranded Natural Gas in Nigeria: Quantitative Analysis and Qualitative Values. The International Journal of Science & Technology, Vol. 5 Issue 8, pp. 154.
[4]	Ekwueme, S., Izuwa, C., Odo, J., Obibuike, U., Ohia, N., and Nwogu, N. (2020). Developments in Gas-to-Liquids Technology Plant Optimisation for Efficient Utilisation of Flared Natural Gas in the Niger Delta. SPE-203668-MS, Paper prepared for presentation at the Nigeria Annual International Conference and Exhibition originally scheduled to be held in Victoria Island, Lagos, Nigeria.
[5]	Izuwa, N. C, Obah, B., Ekwueme, S. T, Obibuike, U. J., Kerunwa, A., Ohia, N. P., Odo, J. E. (2019). Gas-to-Liquids (GTL) Plant Optimization Using Enhanced Synthesis Gas Reforming Technology. Petroleum Science and Engineering. Vol. 3, No. 2, pp. 94-102.
[6]	Boyajian, G., Li, N., Fang, H., Qin, M., Koros, R., Keller, A., Gal., E. (2014). Unlocking Small-Scale GTL: Cost-Effective Platform for Producing Drop-in Fuel from Syngas via Single-Loop, Catalytic Thermochemical Process. IPTC 17435. Paper prepared for presentation at the international Petroleum Technology Conference held in Doha, Qatar.
[7]	Anyasse, D., and Anyasse, R. (2016). Using Small-scale Gas to Liquids for Flare Gas Mitigation. SPE-183161-MS. SPE Paper presented at the Abu Dhabi international Petroleum Exhibition and Conference held in Abu Dhabi, UAE.
[8]	He, Z., Khatu, G., Tenebaum E., Li, W., Han, Z. (2016). Flared Gas Monetization with Modular Gas-to-liquids units: Oilfield Conversion of Associated Gas to Liquids into Petrol at Small-Scales. Paper Presented at the Abu Dhabi international Petroleum Exhibition and Conference held in Abu Dhabi, UAE.
[9]	Fulfold, N., Aquing, F., Meehan, N. D., (2018). New approaches to Gas Monetization in Nigeria. SPE-189181-MS. Paper presented at the Nigeria annual technical conference and exhibition held in Lagos, Nigeria.
[10]	Kanshio Sunday and Ogogo, H. O. (2017). Techno-Economic Assessment of Mini-GTL Technologies for Flare Gas Monetization in Nigeria. Paper Presented at the NAICE SPE, Lagos, August.
[11]	Ekwueme, S. T, Izuwa, N. C., Obibuike, U. J., Kerunwa, A., Ohia, N. P., Odo, J. E, Obah, B. O (2019). Analysis of the Economics of Gas-to-Liquids (GTL) Plants. Petroleum Science and Engineering. Vol. 3, No. 2, 2019, pp. 85-93.
[12]	Eluagu, R. C, Anyadiegwu, C. I. C, Obah, B. O. (2018). Evaluation of Performance Optimization of Modular Gas Turbine System for Monetisation of Associated Stranded Gas in the Niger Delta. International Journal of Engineering Sciences & Research Technology.
[13]	Verghesse, J., (2018). Will at Shore FLNG Drive Low-Cost Monetization and export of Pipeline Gas? An Examination of Concept Features, Opportunities and Challenges. Paper Prepared for presentation at the Offshore Technology Conference held at Texas, USA.
[14]	Mokwenye, P. O. (2020). Evaluation of Gas Hydrate in Gas Pipeline Transportation. Master’s Thesis Submitted to the University of North Dakota, USA.
[15]	Onwukwe, S. I, Duru, U. I. (2015): Prospect of Harnessing Associated Gas through Natural gas hydrate (NGH) Technology in Nigeria, Journal ofPetroleum and Gas Engineering, vol (6) 3, pp. 34-45.
[16]	Zhang, J., Wang, Z., Liu, S., Zhang, W., Yu, J., & Sun, B. (2019). Prediction of hydrate deposition in pipelines to improve gas transportation efficiency and safety. Applied Energy, 253, 113521.
[17]	Onwuka, E. I, Iledare, O. O, Echendu, J. C. (2016). Gas to Power in Nigeria: This Burden on Natural Gas. Paper Prepared for Presentation at the SPE Nigeria Annual International Conference and Exhibition held in Lagos, Nigeria.
[18]	GGFR: Global Gas Flaring Reduction Partnership (2019). Mini-GTL technology bulletin, vol 6, pp1-12.
[19]	Kerunwa, A., Ekwueme, S. T., Obibuike, U. J. (2020). Utilization of Stranded Associated Flare Gases for Electricity Generation in Situ through Gas-to-Wire in the Niger Delta. International Journal of Oil, Gas and Coal Engineering. Vol. 8, No. 1, pp. 28-34.

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APA Style

Ubanozie Julian Obibuike, Stanley Toochukwu Ekwueme, Chinelo Iruamaka Abanobi, Remmy Chindu Eluagu, Anthony Chemazu Igbojionu. (2021). Evaluation of the Economic Potentials of a Mini Gas-to-Liquids (GTL) Plant in Nigeria. International Journal of Oil, Gas and Coal Engineering, 9(6), 98-110. https://doi.org/10.11648/j.ogce.20210906.13

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ACS Style

Ubanozie Julian Obibuike; Stanley Toochukwu Ekwueme; Chinelo Iruamaka Abanobi; Remmy Chindu Eluagu; Anthony Chemazu Igbojionu. Evaluation of the Economic Potentials of a Mini Gas-to-Liquids (GTL) Plant in Nigeria. Int. J. Oil Gas Coal Eng. 2021, 9(6), 98-110. doi: 10.11648/j.ogce.20210906.13

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AMA Style

Ubanozie Julian Obibuike, Stanley Toochukwu Ekwueme, Chinelo Iruamaka Abanobi, Remmy Chindu Eluagu, Anthony Chemazu Igbojionu. Evaluation of the Economic Potentials of a Mini Gas-to-Liquids (GTL) Plant in Nigeria. Int J Oil Gas Coal Eng. 2021;9(6):98-110. doi: 10.11648/j.ogce.20210906.13

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@article{10.11648/j.ogce.20210906.13,
  author = {Ubanozie Julian Obibuike and Stanley Toochukwu Ekwueme and Chinelo Iruamaka Abanobi and Remmy Chindu Eluagu and Anthony Chemazu Igbojionu},
  title = {Evaluation of the Economic Potentials of a Mini Gas-to-Liquids (GTL) Plant in Nigeria},
  journal = {International Journal of Oil, Gas and Coal Engineering},
  volume = {9},
  number = {6},
  pages = {98-110},
  doi = {10.11648/j.ogce.20210906.13},
  url = {https://doi.org/10.11648/j.ogce.20210906.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ogce.20210906.13},
  abstract = {In this paper, the economic potential of using a mini gas-to-liquids (GTL) plant for monetization of stranded associated gas in Nigeria was extensively evaluated. Feedstock to the plant comprises 50 MMscfd of treated stranded associated gas from Assa North in the Niger Delta region of Nigeria. 5000 b/d of GTL diesel product was realized after simulation using Fischer-Tropsch (FT) type modular gas-to-liquids technology. Economic analyses were performed for a wide range of economic conditions to determine the economic potentials of the GTL project. From the result, it was realized that for base case, the net present value (NPV) of the project was US$32,421 barrel-liquid-per-day (BLPD) corresponding to US$162.1 million for 5000 b/d of GTL diesel produced. The payout time (POT) was 4.48 years while the net cash ratio (NCR) was US$81.83 million. The internal rate of return (IRR) was 22.2%. From the sensitivity analyses performed, it was realized that the variable having the most influence on the NPV was the GTL product price (the price of diesel) followed by the capital cost of the GTL plant and then the natural gas price. It was also realized that the operating cost of the plant has the least (negligible) effect on the NPV of the project. Furthermore, it was realized that GTL project remained profitable for diesel prices above US$80/bbl as long as the price of natural gas was maintained below US$2.2/Mscf at 15% discount rates. In general, it was realized that the mini-GTL project was profitable for diesel prices equal to or greater than US$80/bbl as long as discount rates remained below 20% for base CAPEX and OPEX. It was recommended that the government of Nigeria subsidizes the price of natural gas to increase the profitability of mini-GTL projects creating a greater participation by the private investors and thereby reducing the volume of associated gas flared.},
 year = {2021}
}

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TY  - JOUR
T1  - Evaluation of the Economic Potentials of a Mini Gas-to-Liquids (GTL) Plant in Nigeria
AU  - Ubanozie Julian Obibuike
AU  - Stanley Toochukwu Ekwueme
AU  - Chinelo Iruamaka Abanobi
AU  - Remmy Chindu Eluagu
AU  - Anthony Chemazu Igbojionu
Y1  - 2021/12/29
PY  - 2021
N1  - https://doi.org/10.11648/j.ogce.20210906.13
DO  - 10.11648/j.ogce.20210906.13
T2  - International Journal of Oil, Gas and Coal Engineering
JF  - International Journal of Oil, Gas and Coal Engineering
JO  - International Journal of Oil, Gas and Coal Engineering
SP  - 98
EP  - 110
PB  - Science Publishing Group
SN  - 2376-7677
UR  - https://doi.org/10.11648/j.ogce.20210906.13
AB  - In this paper, the economic potential of using a mini gas-to-liquids (GTL) plant for monetization of stranded associated gas in Nigeria was extensively evaluated. Feedstock to the plant comprises 50 MMscfd of treated stranded associated gas from Assa North in the Niger Delta region of Nigeria. 5000 b/d of GTL diesel product was realized after simulation using Fischer-Tropsch (FT) type modular gas-to-liquids technology. Economic analyses were performed for a wide range of economic conditions to determine the economic potentials of the GTL project. From the result, it was realized that for base case, the net present value (NPV) of the project was US$32,421 barrel-liquid-per-day (BLPD) corresponding to US$162.1 million for 5000 b/d of GTL diesel produced. The payout time (POT) was 4.48 years while the net cash ratio (NCR) was US$81.83 million. The internal rate of return (IRR) was 22.2%. From the sensitivity analyses performed, it was realized that the variable having the most influence on the NPV was the GTL product price (the price of diesel) followed by the capital cost of the GTL plant and then the natural gas price. It was also realized that the operating cost of the plant has the least (negligible) effect on the NPV of the project. Furthermore, it was realized that GTL project remained profitable for diesel prices above US$80/bbl as long as the price of natural gas was maintained below US$2.2/Mscf at 15% discount rates. In general, it was realized that the mini-GTL project was profitable for diesel prices equal to or greater than US$80/bbl as long as discount rates remained below 20% for base CAPEX and OPEX. It was recommended that the government of Nigeria subsidizes the price of natural gas to increase the profitability of mini-GTL projects creating a greater participation by the private investors and thereby reducing the volume of associated gas flared.
VL  - 9
IS  - 6
ER  -

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Author Information

Ubanozie Julian Obibuike

Department of Petroleum Engineering, Federal University of Technology, Owerri, Nigeria
Stanley Toochukwu Ekwueme

Department of Petroleum Engineering, Federal University of Technology, Owerri, Nigeria
Chinelo Iruamaka Abanobi

Department of Petroleum Engineering, Federal University of Technology, Owerri, Nigeria
Remmy Chindu Eluagu

Department of Petroleum Engineering, Federal University of Technology, Owerri, Nigeria
Anthony Chemazu Igbojionu

Department of Petroleum Engineering, Federal University of Technology, Owerri, Nigeria

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Plain Text BibTeX RIS

APA Style

Ubanozie Julian Obibuike, Stanley Toochukwu Ekwueme, Chinelo Iruamaka Abanobi, Remmy Chindu Eluagu, Anthony Chemazu Igbojionu. (2021). Evaluation of the Economic Potentials of a Mini Gas-to-Liquids (GTL) Plant in Nigeria. International Journal of Oil, Gas and Coal Engineering, 9(6), 98-110. https://doi.org/10.11648/j.ogce.20210906.13

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ACS Style

Ubanozie Julian Obibuike; Stanley Toochukwu Ekwueme; Chinelo Iruamaka Abanobi; Remmy Chindu Eluagu; Anthony Chemazu Igbojionu. Evaluation of the Economic Potentials of a Mini Gas-to-Liquids (GTL) Plant in Nigeria. Int. J. Oil Gas Coal Eng. 2021, 9(6), 98-110. doi: 10.11648/j.ogce.20210906.13

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AMA Style

Ubanozie Julian Obibuike, Stanley Toochukwu Ekwueme, Chinelo Iruamaka Abanobi, Remmy Chindu Eluagu, Anthony Chemazu Igbojionu. Evaluation of the Economic Potentials of a Mini Gas-to-Liquids (GTL) Plant in Nigeria. Int J Oil Gas Coal Eng. 2021;9(6):98-110. doi: 10.11648/j.ogce.20210906.13

Copy | Download

@article{10.11648/j.ogce.20210906.13,
  author = {Ubanozie Julian Obibuike and Stanley Toochukwu Ekwueme and Chinelo Iruamaka Abanobi and Remmy Chindu Eluagu and Anthony Chemazu Igbojionu},
  title = {Evaluation of the Economic Potentials of a Mini Gas-to-Liquids (GTL) Plant in Nigeria},
  journal = {International Journal of Oil, Gas and Coal Engineering},
  volume = {9},
  number = {6},
  pages = {98-110},
  doi = {10.11648/j.ogce.20210906.13},
  url = {https://doi.org/10.11648/j.ogce.20210906.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ogce.20210906.13},
  abstract = {In this paper, the economic potential of using a mini gas-to-liquids (GTL) plant for monetization of stranded associated gas in Nigeria was extensively evaluated. Feedstock to the plant comprises 50 MMscfd of treated stranded associated gas from Assa North in the Niger Delta region of Nigeria. 5000 b/d of GTL diesel product was realized after simulation using Fischer-Tropsch (FT) type modular gas-to-liquids technology. Economic analyses were performed for a wide range of economic conditions to determine the economic potentials of the GTL project. From the result, it was realized that for base case, the net present value (NPV) of the project was US$32,421 barrel-liquid-per-day (BLPD) corresponding to US$162.1 million for 5000 b/d of GTL diesel produced. The payout time (POT) was 4.48 years while the net cash ratio (NCR) was US$81.83 million. The internal rate of return (IRR) was 22.2%. From the sensitivity analyses performed, it was realized that the variable having the most influence on the NPV was the GTL product price (the price of diesel) followed by the capital cost of the GTL plant and then the natural gas price. It was also realized that the operating cost of the plant has the least (negligible) effect on the NPV of the project. Furthermore, it was realized that GTL project remained profitable for diesel prices above US$80/bbl as long as the price of natural gas was maintained below US$2.2/Mscf at 15% discount rates. In general, it was realized that the mini-GTL project was profitable for diesel prices equal to or greater than US$80/bbl as long as discount rates remained below 20% for base CAPEX and OPEX. It was recommended that the government of Nigeria subsidizes the price of natural gas to increase the profitability of mini-GTL projects creating a greater participation by the private investors and thereby reducing the volume of associated gas flared.},
 year = {2021}
}

Copy | Download

TY  - JOUR
T1  - Evaluation of the Economic Potentials of a Mini Gas-to-Liquids (GTL) Plant in Nigeria
AU  - Ubanozie Julian Obibuike
AU  - Stanley Toochukwu Ekwueme
AU  - Chinelo Iruamaka Abanobi
AU  - Remmy Chindu Eluagu
AU  - Anthony Chemazu Igbojionu
Y1  - 2021/12/29
PY  - 2021
N1  - https://doi.org/10.11648/j.ogce.20210906.13
DO  - 10.11648/j.ogce.20210906.13
T2  - International Journal of Oil, Gas and Coal Engineering
JF  - International Journal of Oil, Gas and Coal Engineering
JO  - International Journal of Oil, Gas and Coal Engineering
SP  - 98
EP  - 110
PB  - Science Publishing Group
SN  - 2376-7677
UR  - https://doi.org/10.11648/j.ogce.20210906.13
AB  - In this paper, the economic potential of using a mini gas-to-liquids (GTL) plant for monetization of stranded associated gas in Nigeria was extensively evaluated. Feedstock to the plant comprises 50 MMscfd of treated stranded associated gas from Assa North in the Niger Delta region of Nigeria. 5000 b/d of GTL diesel product was realized after simulation using Fischer-Tropsch (FT) type modular gas-to-liquids technology. Economic analyses were performed for a wide range of economic conditions to determine the economic potentials of the GTL project. From the result, it was realized that for base case, the net present value (NPV) of the project was US$32,421 barrel-liquid-per-day (BLPD) corresponding to US$162.1 million for 5000 b/d of GTL diesel produced. The payout time (POT) was 4.48 years while the net cash ratio (NCR) was US$81.83 million. The internal rate of return (IRR) was 22.2%. From the sensitivity analyses performed, it was realized that the variable having the most influence on the NPV was the GTL product price (the price of diesel) followed by the capital cost of the GTL plant and then the natural gas price. It was also realized that the operating cost of the plant has the least (negligible) effect on the NPV of the project. Furthermore, it was realized that GTL project remained profitable for diesel prices above US$80/bbl as long as the price of natural gas was maintained below US$2.2/Mscf at 15% discount rates. In general, it was realized that the mini-GTL project was profitable for diesel prices equal to or greater than US$80/bbl as long as discount rates remained below 20% for base CAPEX and OPEX. It was recommended that the government of Nigeria subsidizes the price of natural gas to increase the profitability of mini-GTL projects creating a greater participation by the private investors and thereby reducing the volume of associated gas flared.
VL  - 9
IS  - 6
ER  -

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