Natural gas has been a boon for the Northern Territory – delivering reliable, affordable power and a substantial contribution to economic output and Government coffers.
Now the NT is looking at another way to make gas work for it – by examining the feasibility of applying innovative new technology to turn natural gas into diesel fuel for trucks, cars and other machinery.
The NT Government this week announced it would allocate $500,000 to a study likely to be conducted in Darwin or Tennant Creek.
The NT already uses gas for electricity generation in Darwin and almost all its regional centres. What is not gas-fired is run on diesel. When added to the need for diesel for car, truck transport and agricultural machinery, the NT imports 630 million litres of diesel each year – the equivalent of almost 11,000 barrels a day.
Being able to cut out these imports and replace them with locally produced diesel made from abundant natural gas would provide a big boost to the territory economy as well as providing ongoing jobs where the gas is drawn from the ground and then processed into diesel.
And the beauty of this plan is that the gas diesel is expected to produce much lower rates of emissions than regular diesel.
In making the announcement, NT Chief Minister Adam Giles said that a successful project would be a big win for the NT economy and for the environment.
“We see potential from turning that gas into a low-sulphur synthetic diesel that’s cleaner and greener than diesel that’s currently burned in our cars (and trucks) and in our power stations out bush. If we can make our own fuel for those generators and cars in the Northern Territory we can get cleaner-burning fuel which helps our environment.”
The genesis of the project announcement goes back to last year, when NT Government officials met representatives from a company in the United Kingdom and toured a pilot plant for gas-to-liquids technology in the US State of Ohio (you can read more about that plant here).
The technology is based on the Fischer-Tropsch process developed by German scientists and later used in South Africa when anti-Apartheid trade sanctions cut fuel imports. The technology is now being revisited because of the abundance of natural gas being produced in the USA as a result of the boom in shale oil and gas extraction.
The NT Government believes there are likely to be a number of gas-to-liquid fuel providers operating in the near future.
It believes a gas-to-liquids plant could “easily” be located in Darwin or Tennant Creek to connect to existing gas pipeline infrastructure.
NT/SA regional manager of the Australian Petroleum Production and Exploration Association, Matt Doman, welcomed the government announcement.
It was part of an onshore gas future for the NT which could deliver enormous benefits for all Territorians, he said.
Independent research last year by Deloitte Access Economics found that developing the Territory’s substantial shale gas resource had the potential to create up to 6300 new long-term jobs and generate up to $460 million a year in additional revenue for the NT Government.