Qatar Today talks to Andy Brown, Country Chair of Shell and Managing Director for the Pearl GTL project.
WHAT are current activities that Shell is participating in the oil and gas industry in Qatar?
|a|In July 2004, Qatar Shell GTL and Qatar Petroleum (QP) signed an integrated Development and Production Sharing Agreement (DPSA) that provides for the fiscal and legal terms for a world-scale Gas to Liquids (GTL) plant at Ras Laffan in Qatar. Called the Pearl GTL project, it will be an integrated upstream/downstream project with production currently scheduled to start around the end of the decade. In addition to GTL products, the project will also produce substantial quantities of associated upstream products in the form of condensate and Natural Gas Liquids, such as Liquefied Petroleum Gas (LPG).
Shell plans to invest in offshore facilities and an onshore plant that will produce 140,000 barrels per day of GTL products (primarily naphtha and transport fuels, with smaller quantities of normal paraffin and lubricant base oils), and associated condensate and Liquefied Petroleum Gas (LPG). This will be the largest and most complex single project ever embarked upon in Qatar. Once completed, Pearl GTL will also be the largest GTL project in the world.
On the LNG front, Shell has entered the Qatargas family of worldclass LNG projects through its partnership with QP in the Qatargas 4 project. The project broke ground on April 2, 2006, less than four months after the Final Investment Decision was taken and, alongside Qatargas 3, awarded the onshore Engineering, Procurement and Construction (EPC) contract to the Chiyoda Corporation and Technip France Joint Venture (CTJV).
Qatargas 4 will be an integrated project comprising upstream gas production facilities to produce approximately 1.4 billion cubic feet per day of natural gas, including an average of approximately 70,000 bbpd of LPG and condensate combined from Qatar's North Field over the 25 year life of the project. The integrated project also includes a 7.8 mtpa liquefaction plant and the required LNG shipping capability. The project will be implemented through a joint venture between QP (70 percent) and Shell (30 percent). The majority of the LNG will be sold into the growing markets of North America with some volumes also going to Europe. First LNG cargos are scheduled for delivery around the end of the decade.
In February 2005, Shell signed the commercial agreement for a 10-year lease at Qatar Science and Technology Park (QSTP) and announced the technology programme it plans to implement as an anchor tenant of this facility. Shell will bring a worldclass technology programme to Doha and plans to spend up to $100 million over the 10-year period on R&D and training activities in the new 'Qatar Shell Research and Technology Centre'. The Centre will be part of Shell's global research and technology organization and will initially focus on Exploration and Production and GTL technologies as well as on related training programmes.
The activities of the Qatar Shell Research and Technology Centre have already started from its temporary accommodation in Education City.
Finally, negotiations between Shell and QP continue on the development of a world-scale petrochemical cracker in Qatar. The complex would produce primarily for Asian growth markets and build on Shell's financial strength and technical expertise.
With a multi-billion dollar turnover and major manufacturing facilities around the world, Shell chemicals companies are among the world's largest petrochemical manufacturers, with proven experience in developing world-scale plants for over 75-years.
|q|Is the work going as per schedule?
|a|Pearl GTL is progressing well.
Two appraisal wells are complete.
FEED is also complete and we are now in the Contracting and Procurement process. Project start-up is currently scheduled for around the end of the decade, although we will be able to say more definitively when the project will commence operations once we have taken a final investment decision (FID). We hope to be in a position to take an FID before the end of this year, after we have received the requisite information on contract costs.
On Qatargas 4, the onshore EPC contract was awarded in December 2005 and on April 2nd 2006 HH The Heir Apparent laid the foundation stone for the project. The contracts for drilling, the offshore facilities and pipelines will be finalised over the coming few months. Qatargas 4 financing and other definitive agreements will be finalised during 2006 as per schedule.
|q|Is the GTL aimed mainly for the export market? Are there plans to use this resource here?
|a|The market for GTL products is a global market, but the expectation is that the products from the Qatar project will find their markets predominantly in Europe and the Far East.
|q|Do you feel that Qatar is poised to be the GTL capital of the world?
|a|Yes, and Pearl GTL is Shell's contribution to the realisation of Qatar's bold vision to become the leading global producer of GTL products.
|q|Will the GTL projects deplete Qatar's gas resources?
|a|Pearl GTL will produce around 1.6 billion standard cubic feet per day of wellhead gas. The source of natural gas for this project is Qatar's North Field, which is considered to be the largest single non-associated gas reservoir in the world with total proven reserves of more than 900 tcf.
|q|Do you intend to be a part of the Energy City project and why?
|a|We are aware of the concept behind Energy City, and can see benefits in the offices of companies in the oil and gas sector being located together.
Shell, like many companies in Qatar, is growing fast and we will certainly look at the attractiveness of moving into Energy City in due course when we grow too large for our existing premises. It is well located on the way to Ras Laffan.
|q|How viable is the concept of Energy City? Do you expect Energy companies to relocate back-office operations to this location?
|a|We don't yet know too many details about the development and most importantly how cost effective the real estate offering will be.
I am sure if the developers get the commercial side right, we will see a lot of interest.
|q|How will it facilitate operations for energy companies?
|a|In some other energy hubs in the world, the sector has concentrated its office accommodation in certain areas. This can have synergies and efficient working conditions.
|q|What is Shell's role in promoting the concept of 'clean gas' and a clean environment?
|a|Natural gas makes a major contribution to sustainable development because it is a low carbon fuel, producing lower so-called greenhouse gases than any of the fossil fuels.
Shell is forcing the pace of growth in this part of its business and has pioneered the gas industry for more than 30 years.
Shell has a leading global position in natural gas amongst private energy companies.
© Qatar Today 2006
