Economics of gas to liquids technology for monetization of Alaska North Slope Natural gas reserves

Abstract

The proven natural gas reserves of the Alaska North Slope (ANS) have enormous potential as clean-burning energy resources, if they can be effectively and efficiently utilized. These gas resources, exceeding 35 trillion cubic feet (TCF), currently represent a significant proportion of the energy equivalence of proven ANS oil reserves. With ANS located far from potential markets, there is need to evaluate the prospective economics of promising technologies for monetization of these stranded gas reserves. The economics of the chemical conversion of natural gas to synthetic liquid fuels favored by recent advances in FT synthesis techniques, liquid fuel transportation for the Trans Alaskan Pipeline System (TAPS) operations, and increased demand for clean burning diesel fuels, was the main focus of this study. Economic evaluation using Internal Rate of Return (IRR) analysis, Payout Time and the Net Present Value (NPV) to access and compare the economic viability of 3-train and 4-train GTL Projects is performed. Monte-Carlo simulation using the Crystal Ball software was utilized to run sensitivity analysis, incorporating the probabilistic approach, which generated insightful scenarios on the project economics.