Shell investing $5 billion into Qatar GTL project
20 October 2003
Qatar Petroleum (QP) and Qatar Shell GTL Ltd (Shell, a company of the Royal Dutch/Shell Group), signed an agreement for the construction of the world’s largest Gas to Liquids (GTL) plant in Ras Laffan, Qatar.
The agreement comprises full fiscal terms for the project that will be executed under an integrated Development and Production Sharing Agreement (DPSA). The project includes the development of a block within Qatar’s vast North Field gas reserves, producing 1.6 billion cubic feet-per-day of gas. Qatar’s North Field is the world’s largest natural gas accumulation, with reserves of over 900 trillion cubic feet.
Shell plans to invest around $5 billion to develop upstream gas and liquids facilities and an onshore GTL plant that will produce 140,000 barrels per day (bpd) of GTL products—primarily naphtha and transport fuels, with a smaller quantity of normal paraffins and lubricant base oils—as well as significant quantities of associated condensate and Liquefied Petroleum Gas. The project will be developed in two phases with the first phase operational between 2008 and 2009, producing around 70,000 bpd of GTL products. The second phase will be completed less than two years later.
The conversion of natural gas into liquid fuels is an attractive option to commercialize gas reserves, especially in remote areas of the world where gas cannot be transported to users by pipelines. Diesel fuels obtained through GTL processes have very good properties, such as high cetane, no sulfur and no aromatics. However, GTL fuels bring no life cycle greenhouse gas benefit compared to traditional petroleum fuels (a certain benefit would be possible if CO2 generated during the GTL process was sequestrated).