New Syngas Production Partnership Coming for Western Canada

What do you get when you combine the resources of a forward-thinking Canadian petroleum company and an innovative American syngas company? More opportunities for biofuels expansion, of course.

The Ontario-based Biogas Association estimates that 68 percent of Canada’s biogas industry could potentially be fueled by agricultural resources. That percentage is no surprise considering Western Canada’s prolific agricultural industry and its increasing focus on natural gas. But the ag biogas business could be stronger, according to the association’s 2013 biogas study, which notes that syngas production could not only increase job growth in rural areas (an endemic challenge in many rural sectors), but also provide energy generation at the designated farming facility, as well as contribute better fertilizer and carbon to the soil.

Getting funding for such operations is often difficult however, especially considering that overhead costs often can’t compete with coal or hydropower production, both of which exist in Canada’s western provinces.

So a recent agreement between Petrostar Petroleum in Nanton, Alberta and Maverick Synfuels of Research Triangle Park, North Carolina, offers new possibilities for synthetic fuel production in Canada’s methane-rich prairie provinces.

Under the terms of the memorandum of understanding that was signed by the two companies last Thursday, Petrostar will retain 60 percent of the ownership, while Maverick will maintain 40 percent.

“The plants will utilise and promote technology that converts a methane-rich feedstock into high-quality methanol,” Petrostar outlined in its May 15 press release. “Maverick Synfuels, formally known as Maverick Biofuels, is proposed to commit exclusive licensing to Western Canada with Petrostar committing various petroleum and natural gas properties to the joint venture entity.”

“We are very pleased with opportunity to co-develop and operate a joint venture entity with the guys from Maverick,” Petrostar CEO Mackenzie Loree said. “This transaction will begin a new era for Petrostar and its shareholders.”

Maverick has also contracted with Plant Process Equipment (League City, Texas) to manufacture and sell small-scale gas-to-liquids plants (GTL). These modular plants are mounted on skids and can be quickly transported and installed remotely, even in difficult-to-access terrain. According to Maverick, they can produce up to 10,000 gallons a day of syngas from methane-rich waste gas, or natural gas sources.

“Now, for the first time, waste gas producers have a financially attractive alternative to flaring or generating electricity,” Maverick said in a May 10 press release. “Waste gas sites are abundant worldwide as a source of low-cost methane, albeit in locations remote from markets or pipelines. Only a small percentage of these sites use the methane or biogas to produce energy. Despite government subsidies, economics of electricity production at these locations remain challenging.”

Methane-rich gas streams can come from several different sources, such as anaerobic digesters (what is found on rural farms or land fills) and natural gas reserves that are economically too remote or impractical to extract. According to Maverick, it uses a “spoke and hub” system, in which the fuel is processed at the smaller modular GTL plant, and then shipped to a hub location for further conversion. According to the syngas manufacturer, the two-step process cuts down the costs associated with production.

 Image of Maverick's "spoke and hub" conversion of feedstocks to products courtesy of Maverick Synfuels

Image of an anaerobic digester on a dairy farm courtesy of the USDA