Qatar Petroleum and Shell Launch Integrated Pearl GTL Project
27 July 2006
|The layout of Pearl GTL plant in Ras Laffan measures 1.6 by 1.4 kilometers.|
Qatar Petroleum and Royal Dutch Shell have launched the massive integrated Pearl Gas-to-Liquids (GTL) project in Qatar, with an eventual projected GTL fuel output of 140,000 barrels per day.
The Pearl GTL project includes the development of offshore natural gas resources in Qatar’s North Field, transporting and processing the gas to extract natural gas liquids and ethane, and the conversion of the remaining gas into synthetic liquid hydrocarbon products.
The North Field is considered to be the largest single non-associated gas reservoir in the world with estimated recoverable resources in excess of 900 trillion cubic feet. Over its lifetime the integrated project will produce upstream resources of approximately 3 billion barrels of oil equivalent.
Upstream, some 1.6 billion cubic feet per day of wellhead gas will be produced from the North Field and transported and processed to produce approximately 120,000 barrels of oil equivalent per day of condensate, liquefied petroleum gas and ethane.
Downstream, dry gas will be used as feedstock for a new onshore integrated GTL complex which will manufacture an additional 140,000 barrels per day (bpd) of liquid hydrocarbon products.
The Pearl GTL complex will consist of two 70,000 bpd GTL trains and associated facilities. The plant will produce a range liquid products and fuels, comprising naphtha, GTL fuel, normal paraffins, kerosene and lubricant base oils. GTL fuel is the largest component of the product slate.
The fully integrated Pearl GTL project is being developed under a Development and Production Sharing Agreement with the government of the State of Qatar, covering offshore and onshore costs, with Shell providing 100% of project funding. Production from the first Pearl GTL train is anticipated to begin around the end of the decade, with the start up of the second train following within a year.
The cost, however, could be as much as $18 billion: triple what Shell had originally estimated. The project will cost $4 to $6 per barrel of oil equivalent to produce, Shell disclosed in its quarterly results statement. With an expected 3 billion barrels of oil equivalent of output during Pearl’s lifetime, that brings the capital cost of the project to $12 to $18 billion.
|Hurricane damage to the Mars platform in the Gulf of Mexico.|
Although Shell’s second-quarter earnings were up 36% to US$6.314 billion, its production of crude oil in the second quarter of 2006 dropped 13% compared to 2Q 2005. Production of oil for the first six months of 2006 is down 10% from levels the year before. Shell attributes the drop primarily to continued partial shut-in of production in Nigeria, mainly in the Western Niger Delta due to the security situation, and production deferred in the Gulf of Mexico as a result of the 2005 hurricanes.
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