Shell Prepares First Qatari GTL Gasoil Shipment

Shell Prepares First Qatari GTL Gasoil Shipment

Shell was preparing its first commercial shipment – a ‘medium range’ (MR) size gasoil cargo – from its $18bn-$19bn 140,000 b/d capacity Pearl GTL gas-to-liquids plant in Qatar, MEES learned at press time. An MR cargo is typically 30,000-40,000 tons (224,000-300,000 barrels). The plant will ramp up production to full output, including 50,000 b/d of gasoil, by 2012 from what will be the world’s largest GTL plant. The plant will also produce 120,000 b/d of oil equivalent of natural gas liquids (NGLs) and ethane.

Pearl GTL will add almost 8% to Shell’s production worldwide — making it the company’s main engine for growth for 2012, the company says. It will let Shell corner the global market in GTL products. The difference between the price of gas as a feedstock and refined oil products makes GTL a highly profitable technology. The soaring construction cost of the plant – a nearly threefold increase – had earlier made many have doubts over the viability of the GTL industry.

Shell says GTL gasoil is a diesel-type fuel that will help diversify the supply of diesel fuels and can help to reduce local emissions. It can be blended easily with conventional, oil-based diesel. The first cargo is going into Shell’s existing diesel distribution system. The rise in volumes of GTL gasoil is expected to test the market’s willingness to pay a premium for high quality fuel. GTL gasoil burns with lower sulfur dioxide, nitrogen oxides and particle emissions than conventional oil-based diesel. GTL gasoil can also be used by refineries to upgrade heavier fuel products – it has a lower density and higher cetane number than conventional diesel. Other GTL products include kerosene, naphtha, normal paraffin and base oils for lubricants.

The plant’s NGLs and ethane will be marketed by state-owned Tasweeq. Shell, however, is in talks with Doha about building a petrochemicals plant, which ExxonMobil earlier pulled out of, and is lining up the ethane produced from Pearl GTL for that plant, MEES understands.

Meanwhile, Qatar will increase shipments of LPG to about 11mn tons/year in 2011 from 8.5mn t/y in 2010, Tasweeq CEO Sa'd al-Kuwari said recently. He added: “Qatar will become the largest condensate exporter in the Middle East this year. Condensate exports will rise to 400,000 b/d in 2011, up from 360,000 b/d in 2010.” Mr Kuwari did not, however, give figures for next year when Pearl GTL and Qatar’s LNG trains will be at full output.

Copyright MEES 2011.