Diamondback Energy is focused on improving the profitability of its natural gas assets in the Permian Basin. The company is taking steps to gain more control over its natural gas marketing by securing commitments to pipelines like Whistler, Matterhorn, and the upcoming Blackcomb Pipeline. Additionally, Diamondback is exploring opportunities to create local markets, such as the Verde gas-to-gasoline plant, to avoid selling gas at low or negative prices.
The Verde gas-to-gasoline plant is a proposed facility being developed by Verde Clean Fuels Inc. in partnership with Cottonmouth Ventures LLC, a subsidiary of Diamondback Energy Inc. This plant is set to be located in Martin County, Texas, within the Permian Basin. It aims to be the first of its kind in the United States, utilizing Verde’s proprietary synthesis gas (syngas)-to-gasoline plus (STG+) technology to convert natural gas into gasoline.
Key Features of the Verde Gas-to-Gasoline Plant
- Technology: The plant will employ Verde’s STG+ technology, which has been validated through extensive testing. This technology converts syngas derived from natural gas into fully finished gasoline through a series of fixed-bed reactors in a continuous process loop.
- Production Capacity: The facility is expected to produce approximately 3,000 barrels per day of reformulated blendstock for oxygenate blending (RBOB) gasoline.
- Environmental Impact: The project is designed to utilize stranded or flared natural gas from Diamondback’s operations, which could potentially reduce the flaring of up to 34 million cubic feet of natural gas per day. This not only helps in mitigating greenhouse gas emissions but also produces a high-value product.
- Economic and Strategic Benefits: The plant is intended to de-bottleneck midstream constraints in the Permian Basin, offering economic benefits by providing a salable product and reducing carbon intensity. The project also aligns with Diamondback’s strategy to decarbonize oil field operations.
- Future Applications: While the initial focus is on gasoline production, Verde is exploring the use of its STG+ technology for producing low-carbon diesel and aviation fuel from waste feedstocks, aiming for broader applications both in the U.S. and globally.
- Development Timeline: The front-end engineering and design (FEED) contract has been awarded to Chemex Global LLC, with completion anticipated by early 2025. If the final investment decision is positive, construction could be completed by 2027.
This project represents a significant step in utilizing innovative technology to convert natural gas into gasoline, potentially serving as a model for similar facilities in other regions with pipeline constraints or flared natural gas issues
