Primus Wins by Dancing with Partners
Primus Steps to Commercialization
Primus Green Energy has taken that very important step in the long waltz that leads to full commercialization: they built a 100,000 gallon demonstration plant producing ready-to-use drop-in fuel from natural gas — at consistent quality and scale.
Primus’ technology produces a high octane ‘drop-in’ fuel from biomass, syngas or natural gas. ‘Drop-in’ means it can be used without being blended with other fuels, unlike ethanol. In a long complex process, Primus focuses on the final stage, turning syngas or natural gas into fuel. It’s a process that has been eagerly sought after by countries that don’t have natural oil reserves, but do have a high proportion of biomass, methane or natural gas.
However, getting to commercial scale, where product is being produced in quantities that show the viability of the process, takes a lot of money, expertise and a ready market. In short, getting to commercialization means partners: a network to develop solutions that meet the technology and market challenges quickly, efficiently and with the least possible cost.
Primus proprietary technology, called STG+, is the final step to creating a ready-to-use fuel.
Several years ago the company planned on using renewable biomass in a pellet form, but the market conditions have changed, and they now use natural gas provided by PSEG. As George Boyajian, VP of Business Development said, there are lots of companies turning biomass into syngas. Primus looks forward to using the output of their technologies to produce a high grade fuel. Robert Johnson, President and CEO, added that biomass is a commodity market that has fluctuations and unstable trading indices. As natural gas prices came down, the availability along with the support of PSEG, made natural gas a clear choice.
Building a staff of engineers and scientists, along with several partners, has drastically cut the costs of their demonstration plant. Dr. Boyajian leads a team to search for the best solution to problems as they arise, whether through outsourcing, integrating existing technologies, or building components in their state-of-the-art design and construction laboratory.
As for the process itself, it is like a series of ‘black boxes’, all with their own inputs and outputs. While STG+ is proprietary to Primus, they have worked with several partners to help verify their process, expand their capabilities and ensure consistent quality.
After being frustrated by the quality, cost and time of using outside fabricators for critical parts, Primus built an in-house fabrication shop modeled after Lockheed Martin’s famous “Skunk Works”. This shop gives Primus the in-house ability to create, test, modify and then build key components as they are needed. Primus goes so far as to train welders to standards far above what most learn — let alone use — today. An inspector told Dr. Boyajian that Primus’ welders were the best he’d seen in 25 years. Dr. Boyajian states that many of the welders trained by Primus have gone on to get jobs that would have been unavailable to them without the training.
Long Time Partners
Long time partners have helped validate Primus' technology, provide expertise better supplied by vendors, and helped finance the company.
- Bechtel Hydrocarbon Solutions: Bechtel has been their engineering partner on the design of the demo plant and will be their partner on the design of the first commercial plant.
- Princeton University: Primus is providing financial support to engineers at Princeton University for general research on synthetic fuels, which includes assessments of various gas-to-liquids (GTL) technologies — including Primus’ own STG+ — for sustainability and economic viability.
- Honeywell: is Primus’ partner on the instrumentation for the demo plant and potentially on the instrumentation for the first commercial plant as well.
- IC Green Energy, a division of Israel Corporation (IC), Israel’s largest holding company, has been a long time patient investor. IC Green Energy compliment’s IC’s traditional energy sector, focusing on companies that develop cutting edge technologies, employ risk management in their purchase of raw materials and promote cost-effective production processes. One of the potential sources of natural gas for Primus’ process is the newly discovered natural gas deposits off Israel’s shore. Dr. Yom-Tov Samia, president and chairman of Primus Green Energy and president of IC Green Energy, has been a supporter for seven years. At a recent press conference he thanked the state of New Jersey and the Hillsborough Township for helping Primus through the 161 permits needed to complete the demonstration plant. He also has expressed in the past his disappointment with the lack of financial support from the United States. Since Primus is not relying on subsidies often sought after by alternative fuels companies, his comments seem justified.
Providing Solutions for Gas Flared from Oil Drilling
The realities of the market are an additional factor in driving Primus toward natural gas, as there is a huge market for an on-site solution to the billions of dollars wasted by flaring the natural gas that accompanies oil drilling. The Bakken oil fields in North Dakota are an example. Royalty owners there have recognized the waste and are taking action. They have recently sued ten US and international oil companies for their share of an estimated $1 billion being flared in the Bakken each year. Their attorney, Britton Monts, said:
“There’s so much waste going on. By forcing them to pay royalties on that flared gas, we hope that pushes these producers to fix the problem a lot faster.”
In Texas, the number of state-issued flaring permits is soaring from 306 permits in 2010 to 3,012 permits this year. For drilling companies, there are advantages for using flared gas to produce much needed fuel for ongoing operations. Companies that have drilling rigs in remote areas need fuel for electrical generators, powered by big diesel engines. The exploration and production company, Apache Corporation, notes that last year the drilling industry nationwide used 700 million gallons of diesel fuel to pump sand and water during fracking operations.
Shell Oil, recognizing the benefit, has built a GTL (Gas to Liquids) plant in Qatar, the Pearl GTL. A joint development by Qatar Petroleum and Shell, the plant will process about three billion barrels-of-oil-equivalent over its lifetime from the North Field, which stretches from Qatar’s coast out into the Gulf. The North Field contains more than 900 trillion cubic feet of gas, about 15% of worldwide gas resources. It will produce enough fuel to fill over 160,000 cars a day and enough synthetic base oil each year to make lubricants for more than 225 million cars.
That’s the good news.
However, according to Energy Intelligence, the plant was slated to cost up to $5 billion US, but may reach $24 billion. Since the input is free, the expectation is that the plant should be profitable when oil reaches $40 a barrel – a relatively low bar in today’s economy.
Another advantage is Primus’ newer technology. The Qatar plant is based on a process known as Fischer–Tropsch, developed in the 1920s in Germany. The process produces crude that is high in by-products, such as durene, which must be removed in another refinery process in order to be used as fuel. As a result, the Pearl GTL does not produce ‘drop-in’ fuel.
As pressures from lease holders as well as environmentalists rise, energy drillers are increasingly likely to look for a solution that is economical, can be deployed on-site in a timely manner and will produce a fuel that is ready to use. Primus is ready to supply that solution.
Primus is a company based in the United States, developing an innovative US technology. Their journey from an idea to a plant that is now making 6 barrels a day — and will soon be doing more – is the kind of innovation that makes the US more competitive in a global marketplace, while solving an important environmental problem. There is a lot to learn from their diligence, persistence and insight.