QP, Shell Overcome Cost Concerns To Launch Pearl GTL Project
Qatar Petroleum (QP) and Shell on 27 July announced the launch of the integrated Pearl GTL project, overcoming the sharp cost hikes that had threatened to derail the project (MEES, 15 May). Cost estimates for the project rose from $5bn in early 2005 to over $10bn mainly due to the shortage of contractors and the rising cost of raw materials. This prompted a general rethink by the partners on the cost structure, at one point raising the prospect that the project could have been radically restructured or even scrapped. But the decision to launch the project demonstrates that for now at least, Qatar has not allowed rising costs to derail its GTL program. In June, Qatar inaugurated its first commercial scale GTL project, Oryx GTL (MEES, 12 June).
Pearl GTL includes gas development in the North Field, transporting and processing the gas to extract NGLs and ethane and the conversion of the remaining gas into clean petroleum products at what will be the world’s largest integrated GTL complex in Ras Laffan. Upstream, some 1.6bn cfd of wellhead gas will be produced from the North Field and transported and processed to produce approximately 120,000 boe/d of condensate, LPG and ethane. Downstream, dry gas will be used as feedstock for the onshore GTL complex which will manufacture an additional 140,000 b/d of liquid products. The Pearl complex will consist of two 70,000 b/d GTL trains and associated facilities. The plant will produce a range of clean liquid products and fuels, comprising naphtha, GTL diesel, normal paraffins, kerosene and lubricant base oils. GTL diesel is the largest component of the product slate and can be used in existing light and heavy-duty diesel engines.
The fully-integrated Pearl GTL project is being developed under a Development and Production-Sharing Agreement (DPSA) with Qatar, covering offshore and onshore costs, with Shell providing 100% of project funding. The award of various engineering, procurement, construction and management contracts for execution of the project has now begun, the partners said. 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.
