It’s a gas, gas, gas . . . to liquid
You know something is a big fat economic deal when companies from St. Louis to South Korea, from Frankfurt to Seoul, from Amsterdam to the Arkansas Teacher Retirement System are lining up to be a part of it, or help finance it, or underwrite it. That’s happening to a particular piece of ground, owned by a particular company, near Pine Bluff.
It’s been a long time coming, and it’s not here yet, but the long-awaited GTL Americas gas-to-liquids project appears closer to reality than ever before.
According to the paper, the company announced last week that South Korean conglomerate Hyundai ENG America and Houston-based S&B Engineers and Constructors will be the design and planning partners for the 1.7 million-gallon-per-day plant that has been in the works for over a decade.
In 2018, estimated construction costs rang in at
$3.5 billion, making it the largest proposed industrial project in the state’s history, even larger than
Big River Steel’s $3 billion price tag in Osceola. Construction will employ 2,500 workers, and 225 full-time permanent jobs will be filled once operations begin, projected in 2029.
To put the 1.7 million-gallon-perday (620 million per year) refinery in perspective, according to the U.S. Department of Energy, annual diesel fuel consumption in Arkansas is around 800 million gallons.
So, what is GTL anyway?
First, let’s be clear that we’re talking about GTL (gas-to-liquid), not LNG (liquefied natural gas).
LNG is natural gas cooled to negative 260 degrees Fahrenheit, the temperature natural gas must reach to liquefy. LNG is stored in ginormous thermoses until it’s fed into a pipeline headed for its end use, which is typically power generation.
GTL is different. A process known as Fischer-Tropsch takes the natural gas you might find in the Fayetteville Shale, or any other natural gas field on the planet, rearranges the molecules and turns it into liquid. Temperature is not an issue.
This plant will make high-grade, environmentally friendly, ultra-low sulfur diesel fuel and synthetic jet fuel comparable to Jet A-1 fuel.
It may sound like science fiction, but it’s old news. Six GTL plants operate around the world today and have been for years. South Africa and Qatar each have two and Malaysia and Nigeria have one each. They all use the same Fischer-Tropsch process developed in Germany in the 1920s.
If it works in Asia and Africa, why not Arkansas?
We first became familiar with GTL Americas nearly 10 years ago, and to be certain, skepticism over the viability of this project has run high in financial and political circles since the concept first surfaced. And it stands to reason. Any effort touted as the largest industrial project in Arkansas history is ambitious by nature, and the idea of turning gas molecules into liquid molecules sounds far-fetched. Further, natural gas markets are volatile.
But let’s be clear. It’s been done before.
The fact that the project is still alive is testament to the relentless hard work put in by the entrepreneurs involved. The combination of debt and equity that comes from the Arkansas Teacher Retirement System and Energy Security Partners of Little Rock also includes capital from Amsterdam, Italy, Tokyo, Germany and South Korea.
From a brass-tacks perspective, Dallas-based pipeline Energy Transfer has been contracted to deliver the gas from Oklahoma, Texas and possibly northwest Arkansas. Everything seems to be in place, and all systems are set to go.
It’s been a long time coming, but it’s getting closer. Hard hats to off to GTL Americas.