Cerilon signs with Chevron to launch GTL project in North Dakota

Cerilon Inc., a privately held company headquartered in Calgary, Alberta, Canada, which manages a portfolio of transitional energy, chemical and professional services companies, announced a strategic partnership with Chevron U.S.A. Inc., through a series of technology licensing agreements.

This collaboration marks a significant step forward, granting Cerilon access to Chevron’s advanced hydroprocessing technologies for its gas-to-liquids (GTL) project in Williams County, North Dakota, U.S.A.

GTL North Dakota will be the first GTL facility to be built in North America and the first GTL facility worldwide built with a commercial carbon capture and sequestration (CCS) component.

The 24,000 barrel-per-day facility near Trenton will use natural gas that might otherwise be vented or flared to create high-value products, including transportation fuels, GTL base oils and specialty products.

“This agreement demonstrates our approach to collaborating with world-class partners and major licensors to deliver this project, the first of many in our development pipeline,” said Nico Duursema, CEO of Cerilon.

The GTL facility, a cornerstone of Cerilon’s development pipeline, is designed to produce ultra-low sulphur diesel, naphtha, and API Group III base oils. These processes involve converting natural gas into synthesis gas, followed by the Fischer-Tropsch process to create a waxy feedstock, which is then refined using Chevron’s hydroprocessing technologies.

According to Duursema, Cerilon has completed the second phase of the GTL North Dakota’s front end loading (FEL 2) stage, which defines the project’s scope, costs, and schedule. Now, they’re getting ready to start the FEL 3 or FEED stage. FEL 3, also known as the front end engineering design (FEED) stage, is where the project’s details are finalised. In this phase, they will complete the detailed engineering designs, finalise the budget, and prepare everything needed to start the actual construction or implementation of the project.

North Dakota is a significant producer of natural gas, contributing about one-third of the state’s energy production. Trenton is located in the northwestern part of the state near the Bakken Formation, which is a major geological formation underlying parts of North Dakota, Montana, and into Canada. The Bakken Formation is one of the largest oil and natural gas plays in the United States and has been a significant driver of oil and gas production in the region.

In 2020, the latest figures available from the state government, North Dakota produced 985.8 million MCF (thousand cubic feet) of natural gas, of which more than 93% was produced in Bakken.

Coincidentally, Chevron U.S.A.’s parent, Chevron Corp. will have a significant presence in the Bakken Formation if its planned acquisition of Hess Corporation, one of the largest operators in the Bakken shale play, goes through. ExxonMobil has officially filed for arbitration regarding the Hess acquisition by Chevron, particularly concerning the stake in the Guyana oil block that Hess holds. This development has introduced potential delays and added complexities to Chevron’s acquisition process of Hess.