Greyrock Energy said it plans to build a small scale gas-to-liquids facility in Houston in late 2015, taking advantage of a glut of cheap natural gas to be converted into high grade diesel fuel.
The company, based in Sacramento, California, has not announced where the plant will be set up, nor who its customers will be. But the project has backing from Sterling Private Capital and Eagle Oil & Gas Co., both based in Dallas. The facility will be able to process as much as 50 million cubic feet per day of natural gas to produce 5,000 barrels per day of diesel.
Greyrock CEO Robert Schuetzel said the company’s partners also have plans to expand into several major shale plays across the U.S., like the Marcellus and Utica, as well as along the Gulf Coast and into Canada.
“We believe this is becoming a very large market,” Schuetzel said. “There’s a lot of demand for premium diesel products in the Houston area, like high cetane fuel and ultra-low sulfur fuel.”
Though the plant could be the first, it’s unlikely to be the last. According to Industrial Info Resources, a Sugar Land-based market analysis firm, $25 billion worth of new GTL projects in the U.S. have been proposed for 2015-16. Natural gas unlocked by hydraulic fracturing in the U.S., among the cheapest fuels in the world, has helped American petrochemical companies out-compete their European counterparts in producing valuable chemicals and transportation fuels.
Greyrock is also competing against other companies that claim to be the first to bring small-scale commercial GTL projects to the area. Schuetzel said the modular design of its plants and the company’s multiple fabrication facilities allow for the quick turnaround time, which could give it an edge. And its plants will be flexible, able to handle as little as 1 million cubic feet of gas per day.
In August, Biofuel Power Corp. also said it would build the first small scale GTL plant 10 miles south of downtown Houston that will serve as a pilot project for several other small plants planned for oil fields across the U.S.
And South Africa-based Sasol Ltd. could spend up to $21 billion on a large scale project in Louisiana that could be finished by 2017.
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