Commercial production of motor fuels from natural gas should begin early next century, according to consulting firm Arthur D Little.
Ian Moncrieff, the director of ADL’s natural gas practice, said the technology to produce gasoline and diesel from natural gas ‘was not a limitation at this point’ with Exxon and Shell among the three leading developers.
The end products offer the advantage of being free of sulphur and aromatics, which produce particulates in diesel exhausts.
Moncrieff said a plant with a daily throughput of 50,000-100,000 barrels a day would be commercially viable with crude oil prices at $17 $18 a barrel with cleaner fuels commanding a possible premium.
Crude prices are now $5 a barrel below this, but could rise to a viable level in the five years it would take to build a gas-to-liquids (GTL) plant of this size.
Discussions are under way for possible projects in the Middle East, South America and the UK to exploit gas in the oil fields to the west of Shetland.
An ADL study published this year said global GTL production would reach 1 million to 2 million barrels a day by 2015, involving an investment of $25bn $50bn (£15bn £30bn).