Primus Green Energy: Biofuels Digest’s 2014 5-Minute Guide

Primus’ liquid fuel synthesis technology is a proprietary low cost  process to convert syngas to gasoline, jet fuel and aromatic chemicals directly, without the need for further treatment. The result is a highly efficient process, producing approximately 5 gallons of drop-in transportation fuels per mmBTU of natural gas. The process produces drop-in fuels that are ready for immediate distribution, sale and consumption using the existing infrastructure. The “plus” in STG+ stands for the multiple end products yielded by the process.

The Situation:

In June 2012, Primus Green Energy shifted the feedstock for its 5-barrel-per-day demo facility in Hillsborough to shale gas from wood pellets or miscanthus as originally planned. The company’s technology synthesizes feedstock into gasoline using an off-the-shelf catalyst and is meant to break even when oil is at $65 a barrel.

“At the end of the day, natural gas is financeable,” says Primus CEO Robert Johnsen, simply enough. The former Mascoma CEO said that “I have hit my head against the walls, for years now, to get biofuels expanded beyond lab to the demo and from the demo to industrial scale. You have to get the financing. There’s no future for biofuels without financing. That’s where the rubber meets the road. Everyone we talk to – strategics, airlines, equity investors – however enticing pure biomass-fed fuel is to them, in the end, they want an alternative to crude oil, and they want it at scale. A natgas product is greener than crude, and probably cheaper in the long run. We’ll do that now, because getting to scale, being successful, makes the future of everything else you do possible.”

“Convincing company equity investors that the project is financeable – that’s been a challenge in this entire sector,” says Johnsen. “With this first project, we are isolating the Syngas-to-gasoline technology as the only element that has any degree of risk or process risk. And we’re working to bring forward an EPC to provide some kind of performance guarantee, or we may bring forward a wrap via an insurance company. For the insurance companies, it’s easier for them to get their arms around the challenge of offsetting risk.”

Model:

Owner-operator.

Past milestones:

In February 2014, Primus Green Energy was awarded a patent for its STG+ gas-to-liquids technology, which it will implement in a commercial plant they are expected to break ground on this year. The technology uses syngas derived from natural gas and other carbon-rich feedstocks to produce high quality, cost-effective, drop-in liquid fuels in a single-loop process. STG+ represents a cost breakthrough for the GTL industry, as it demonstrates compelling economics at scales of less than 6,000 barrels per day. The patented process is far simpler and more efficient than existing GTL technologies as it transforms syngas to liquid fuels with only one condensation step and also recycles untransformed gases.

In October 2013, Primus announced the commissioning of its up to 100,000 gallon-per-year natural gas-to-gasoline pre-commercial demonstration plant at its Hillsborough facility. The demonstration plant utilizes Primus’ proprietary STG+ technology, which is a four-reactor catalytic process that converts syngas derived from natural gas or other feedstocks  to gasoline, jet fuel, diesel or aromatic chemicals directly, without the need for further treatment. The process produces drop-in fuels that are ready for immediate distribution, sale and consumption using the existing fuel distribution infrastructure.

Future milestones:

First commercial plant.

The main production train checks in at 28 million gallons, but future plants will have multiple trains, and the second commercial plant is expected to reach 111 million gallons. For plant number one, they probably won’t even use natural gas. The gas works fine, and is mighty affordable, but you need a steam reformer plant to convert the natural gas to syngas, and that could add as much as $150 million to the overall cost of the project. Tougher to finance. What they are aiming for is a cost of $150 million for the first plant, or less than $6 capex per gallon of capacity, if they can buy syngas “over the fence”. The overall economics are startling, with natural gas. When they are using $4 per MMBTU natural gas instead of $100 per barrel crude oil, it’s $2 per gallon of gasoline, capex, opex, the whole shebang. For 93 octane gasoline

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