by Peter Sibon reporters@theborneopost.com. Posted on June 13, 2011, Monday

QATAR: As Qatar is a desert sheikdom with a notoriously high temperature that can reach as high as 45 degrees centigrade on a typical hot summer day, some 52,000 men and women scramble to their workplaces early in the morning to avoid the scorching heat to start their day.

That was a typical day during the peak period at the construction site of the world’s largest integrated Gas to Liquids (GTL) project at Pearl GTL last year.

Shell’s executive vice president and managing director of Pearl GTL Andy Brown said these men and women from 60 countries would normally work 60 hours a week to ensure that the project worth RM60 billion (US$20 billion) would be completed on schedule.

The mammoth project started in 2006 and was now at its final stage of completion.

And on March 23, this year, Pearl GTL created history when its first flow of dedicated offshore gas was finally processed at the giant Pearl GTL plant, located in Ras Laffan Industrial City, some 90 kms from Doha. Brown was optimistic that the project would be fully operational by middle of next year.

“When fully operational, Pearl GTL is expected to make some US$4 billion a year based on a US$70 per barrel,  disclosed Brown to journalists at the Pearl GTL plant recently.

Some 20 journalists mostly from Europe were invited by Shell to visit the Pearl GTL plant from May 29 to June 1.

Beside The Edge Malaysia, The Borneo Post was the only media from this part of the world to be invited by Shell for the four-day tour.

However, looking at the sheer vastness of the project, I was wondering how I could connect this mammoth project to our readers back at home.

Then came the answer from Brown that Borneo Post had been invited because the people of Sarawak should be proud of themselves as the giant Pearl GTL project was made into a reality due vastly to the success of the GTL project in Bintulu.

Back then in 1986, Shell, Mitsubishi, Petronas and the Sarawak Government decided to commercialise the Shell GTL process in Bintulu, making it the first commercial GTL plant in the world.

The first GTL plant was commissioned in 1993, designed to produce 12,500 barrels per day of high quality GTL products including a wide range of specialties like pure waxes which could be processed into various products such as diesel, kerosene, paraffin, jet oil and lubricants.

Bintulu made its first shipment of GTL in September that year.

“Bintulu was the first plant of its kind and contained many new technologies and as anticipated it took several years to stabilise production but the core heavy paraffin synthesis and heavy paraffin conversion processes operated smoothly from the start,” said Brown.

But production at Bintulu plant was interrupted in 1997 by an explosion in the cryogenic Air Separation Unit. A subsequent investigation by Shell experts found that this was caused by high levels of air pollution from massive foist fires burning in South East Asia at the time, which got into the oxygen system through the filters.

Reconstruction was completed in 2000 and production resumed. Numerous improvements were made in the reconstruction, building on experience from the initial years. Performance of the plant quickly reached world-class operational reliability, where it remains today.

A de-bottlenecking was implemented in 2003, with relatively minor modifications to increase the production capacity to 14,500 barrels per day. In July 2004, Bintulu exported its thousandth shipment of GTL product.

“By 2001 Shell was convinced that it had the technology, operating experience and commercial knowledge to develop a world-scale GTL plant. We began a search for a government partner and the country with natural resources and vision to make this ambitious project a reality was Qatar, revealed Brown.

On full production, Pearl GTL will be able to produce some 1.6 billion cubic feet of gas per day from the North Field, which would be processed to generate 120, 000 barrels per day of condensate and natural gas liquids and 140, 000 barrels per day of GTL products.

Shell, which is the operator of the Pearl GTL plant, opened natural gas wells offshore some 60 kms away, allowing the gas to flow through a subsea pipeline into the GTL plant onshore.

Brown also explained that the first step in the GTL process, natural gas (methane) was converted into a mixture of carbon monoxide and hydrogen which was known as syngas. The natural gas was partially oxidised in a non-catalytic reaction with 99.8 per cent pure oxygen.

“The reaction is then conducted at temperatures around 1300 degrees Celsius in a steel vessel clad with insulating material. The reaction has a high selectivity, meaning it achieved a greater than 95 per cent conversion of the carbon in methane to carbon on carbon monoxide. Waste heat is then used to make steam which is then used to power equipment,” explained Brown.

He said that sections of the mega plant would be started up progressively over the coming months. Presently there were some 30, 000 workers employed at the Pearl GTL plant.

“We also created a record safety result of 77 million man-hours of Lost Time Injury (LTI)-free in 2010, declared Brown.

Indeed the project would be able to meet the demand for green energy once it is fully operational next year.

Brown said Shell GTL’s potential markets included Europe, United States and Japan.

“This is especially true when countries such as Germany which has decided to stop its dependence on atomic power completely by 2022,” added Brown.

Qatar, has an estimated population of 300,000 people with an additional expatriate population of 1.2 million is a major gas resource holding country with over 900 trillion cubic feet of proven reserves in the North Field. Less than a quarter of these reserves were committed to the current project at Pearl GTL.

While the global demand for fossil fuel keeps rising causing fear that it would deplete in the very near future. Shell chief executive officer Peter Voser reckoned that oil reserves would last for another 50 to 80 years and gas would last for another 250 years.

“But with our current high level of technology, we are confident that we will be able to find new frontiers to tap these resources in the very near future, added Voser.

SOURCE ARTICLE

Energy Minister Al-Attiyah and Malcolm Brinded of Shell, sign the Pearl GTl Project DPSA

From “Outspoken”, a former employee of Shell Oil USA

John,

I don’t have time to prepare a full blow article for you, so I decided to drop you a note about Shell and its gas investments that will give you an idea as to why Shell is moving toward natural gas as the anchor for its business.

Attached is the link to an article on the Pearl GTL project in Qatar. Shell has an enormous investment in this project and Qatar has some of the greatest natural gas reserves in the world.

Pearl Gas-to-Liquids Project, Ras Laffan – Hydrocarbons Technology

Qatar’s Golden Age

In any event, this will be a huge money maker for Shell in the coming years. So, will other similar projects. Qatar has about 900 tcf of gas reserves. This is about 900 billion bbl of liquids if completely converted. That is a HUGE reserve number. The UAE also has vast gas reserves, as does Iran and Russia.

This makes Qatar a very important long term profit center for Shell. For this reason alone it does not surprise me that Shell is playing the ‘seconding’ game in Qatar and the UAE as they have done in Nigeria.

By Eduard Gismatullin – May 19, 2011 2:37 PM GMT+0100

Royal Dutch Shell Plc (RDSA), Europe’s largest oil company, said a $19 billion investment in Qatar may prove that abundant natural gas coaxed from shale rocks across the U.S. could be converted into diesel and jet fuel.

Shell, which is completing the world’s largest gas-to- liquids plant in Qatar, could use the technology on a smaller scale in the U.S. if capital costs can be reduced, Marvin Odum, head of Shell in the Americas, said in an interview in London. The technology uses catalysts to turn natural gas into jet fuel, diesel and other liquids.

The development of shale fields made the U.S. the world’s largest gas producer in 2009 and caused a slump in prices. Today’s price of $4.18 is equivalent to about $24 a barrel of crude. Oil is trading at about $100 a barrel in New York.

“It’s an important thing for the U.S. that they found this huge shale gas resource” to reduce dependence on oil imports, said Hannes Loacker, an analyst with Raiffeisen Bank AG in Vienna. “The longer gas prices will stay at such a low level, the more will happen” because producers will look for ways to gain from mispricing.

Oil, Gas Arbitrage

U.S. gas producers are examining different ways to benefit from the arbitrage between oil and gas prices. In the nearer term, compressed and liquefied gas is likely to play a greater role as a transportation fuel, Odum said. Exports of liquefied natural gas by ship are possible from North America, more likely from Canada than the U.S., where there are political obstacles to exports, he said.

Shell expects to produce the equivalent of 400,000 barrels of gas in the Americas in 2015, double the figure in 2009, as it invests $40 billion in the region, The Hague-based company said last year.

Shale gas may account for 47 percent of total U.S. production in 2035, up from 16 percent in 2009, according to the Energy Information Administration.

Shell’s Pearl GTL plant in Qatar will start production this year and make enough diesel to fuel 160,000 cars a day when it reaches full output. It will also make kerosene and base oils.

BG Group Plc (BG/), a U.K.-based producer that has U.S. shale fields, agrees that gas-to-liquids may have a future in North America.

‘Huge Differential’

BG expects producers to find ways to benefit from “the huge differential between the cost of oil and the cost of gas,” Chief Executive Officer Frank Chapman said last week. That may help to reduce petroleum imports to the nation with the help of “middle distillate synthesis from gas.”

The U.S. government is examining at least nine proposals to allow exports of LNG produced from domestic gas. BG and Southern Union Co. (SUG) were the latest to seek permission from the Department of Energy. Companies would like to supply the fuel to Asia or Europe where prices are higher.

“There are many other proponents talking about not only exporting gas, but finding other uses for it in the U.S.,” such as chemicals and fertilizers, Chapman said. The gap between oil and gas prices will narrow over time and it “will be good for owners of substantial gas reserves.”

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

SOURCE ARTICLE

Saturday, 26 June 2010 22:09

DOHA: The Board of Directors of Royal Dutch Shell plc has met in Doha, underlining the importance of the country as a new heartland for Shell.

Chairman Jorma Ollila, Chief Executive Officer Peter Voser and other senior Board members were received during their visit by Deputy Premier and Minister of Energy and Industry, H E Abdullah bin Hamad Al Attiyah.

The Board of Directors which consists of three Executive Directors, nine Non-Executive Directors and the Company Secretary meets around eight times a year, usually in Shell’s headquarters in The Hague, to discuss Shell’s business and plans. Once a year the Board visits a key location for Shell’s global business and in 2010 they decided to come to Qatar.

The Board meeting was held at the Qatar Shell Research & Technology Centre at the Qatar Science & Technology Park. During a break in their meetings the Directors were briefed on progress in some of the research programmes being undertaken by Shell at the science park, where the company is investing $100m over 10 years.

The Board also visited the Pearl Gas to Liquids (Pearl GTL) and Qatargas 4 construction sites in Ras Laffan Industrial City and was briefed on progress on these projects.

Pearl GTL, which Shell is building with Qatar Petroleum (QP), is Shell’s largest single investment worldwide. Over 50,000 workers are currently employed on the construction site, which is the largest in the oil and gas industry.

At the project site, the Board members met with employees, acknowledging them first-hand for their achievements, particularly in safety, where the onshore project has just reached 60 million hours without an injury involving lost time.

Qatargas 4 combines Shell’s global leadership amongst private energy companies in liquefied natural gas (LNG) with Qatar’s vision to become the world’s leading LNG exporter. QP is a 70 per cent shareholder in Qatargas 4, with Shell holding 30 per cent.

Jorma Ollila, Chairman of Shell, said, “Shell is proud to have been chosen by the State of Qatar as its partner in Pearl GTL and Qatargas 4 and we intend to live up to that trust.”

Peter Voser, Chief Executive Officer of Shell, noted that Shell is developing a long-term, trusting and mutually-beneficial relationship with the State of Qatar. “This country is vital for the future of Shell and I believe we are making a valuable contribution to the achievement of Qatar National Vision 2030. Holding the Board meeting here underlines the importance of Qatar to Shell,” he said.

the peninsula source article

INVESTOPEDIA

Posted: Apr 02, 2010 15:34 PM by Eric Fox

Royal Dutch Shell (NYSE: RDS.A, RDS.B) will utilize its large portfolio of international upstream projects to grow production, reaching 3.5 million barrels of oil equivalent per day (BOE/D) by 2012. This 11% production growth will be powered by the startup of large projects in its international portfolio, including ones in Qatar and the Canadian oil sands.

These and other international projects initiated by Royal Dutch Shell will add about 600,000 BOE/D to its production base over the next three to four years.

Canada

In the Canadian oil sands, Royal Dutch Shell operates the Athabasca oil sands project and has a 60% interest here. This project first came on line in 2002 and produced 130,000 barrels per day in 2009.

Royal Dutch Shell is currently mining only at the Muskeg River site, but it has a Phase I expansion under construction that will add 100,000 barrels per day to the project.

The Athabasca oil sands project works at a fairly low oil price with cash operating costs of just over $30 per barrel.

Chevron Corp. (NYSE: CVX) and Marathon Oil (NYSE: MRO) are also involved in the Athabasca oil sands project, each with 20% ownership.

Qatar

In Qatar, Royal Dutch Shell has two large projects under construction – the Pearl Gas To Liquids (GTL) project and Qatargas 4, a liquefied natural gas (LNG) facility.

The Pearl River GTL project will take natural gas from Qatar’s North Field, which contains 900 trillion cubic feet of natural gas reserves, and put it through a complex process to produce liquid transportation fuels and natural gas liquids. The project will have peak production of 260,000 barrels per day of various products.

Qatargas 4 is a single-train LNG facility, and it will also receive natural gas from the North Field. The LNG will be shipped to customers in the United States and China. Qatargas 4 will have peak production of 280,000 BOE/D.

Construction on both projects is set to be completed by the end of 2010, followed by startup production in 2011.

Australia

Royal Dutch Shell is also working on other LNG facilities. The company discovered natural gas at the Prelude and Concerto fields off the coast of Australia, and it is constructing a floating LNG facility to process this stranded gas. The natural gas will be processed entirely offshore, reducing the project’s footprint.

Brazil

Royal Dutch Shell is also developing heavy oil resources offshore from Brazil. The company has a 25% ownership of the Parque das Conchas project along with Petrobras (NYSE: PBR). This project started up production in 2009 and is designed to produce 100,000 BOE per day at its peak.

International Investment To Power Promised Production

Royal Dutch Shell will use its heavy investment in international upstream projects to power its promised production over the next few years. The company must make continued investments here as well to grow in the long term. (For a primer on the oil and gas industry, refer to our Oil And Gas Industry Primer.)

SOURCE ARTICLE

By Stanley Reed and Robert Tuttle

March 4 (Bloomberg) — Royal Dutch Shell Plc spent $19 billion, triple the original estimate, to build the world’s largest gas-to-liquids plant. Now, it’s pay-off time and the company says the project may generate $6 billion a year.

Shell needs the plant, known as Pearl, to bolster output, which fell for a seventh year in 2009 in part because rebel violence hampered oil ventures in Nigeria. Qatar, the arid Gulf state that’s become the world’s biggest exporter of gas on ships, may account for 10 percent of the company’s production after Pearl and a liquefied natural gas project start deliveries next year.

Shell’s work in Qatar is “like creating a new Nigeria,” Andrew Brown, the company’s executive vice president for the country, said in an interview in the capital, Doha. Pearl will begin processing gas toward the end of this year and start delivering fuel in early 2011, he said.

Gas-to-liquids technology, a relatively expensive way to make diesel and jet fuel, makes more sense given today’s disparity between natural gas and oil prices. Converted into barrels of oil, gas is less than half the price of crude, which doubled to near $80 in the last year. At full capacity, Shell said Pearl will churn out 140,000 barrels a day of liquid fuel and 120,000 barrels equivalent of ethane gas and condensate, a by-product that’s like a light crude oil.

“GTL is a very expensive, energy intensive process,” said Iain Anderson, an analyst at brokers Brewin Dolphin Holdings Plc in London. “But the result you get is fantastic.” Pearl could be paid off in five years, Anderson said.

Airlines, Cars

Since the fuel Pearl will produce is purer than traditional crude-based products, Shell may be able to sell its production at a premium. Pollutants such as sulfur are stripped out of the gas, making it well-suited to green-minded airlines or clean diesel for cars.

Operating costs at Pearl will be about $6 a barrel, Brown said, and the company can reclaim the cost of building the plant through the production-sharing agreement it has with Qatar. With crude at $70 a barrel, Pearl would generate about $6 billion a year in profit for Shell and Qatar, he said.

“GTL starts to make sense when there is a spread between oil and gas prices,” said Ross Cassidy, an analyst at Edinburgh-based Wood Mackenzie Consultants Ltd.

Ras Laffan

Pearl’s webs of tanks and piping sprawl over a 4-square- kilometer (1.5-square-mile) area at Qatar’s Ras Laffan site. An estimated 51,000 workers, their necks draped in cloth to ward off the blazing Gulf sun, weld joints, dig ditches and direct traffic with red and green flags. The workers, mostly men, wear color-coded helmets indicating their roles. White hats are for managers, red for scaffolders, yellow for pipefitters.

Shell project engineer Wiliam Keij said that the start-up will last for months as unit after unit is fired up. At the heart of Pearl will be twenty-four 1,200-metric-ton reactor vessels filled with pipes where gas will be converted into paraffin through interaction with catalysts. The paraffin then flows on into refinery-like units where it will be broken down into kerosene for jet fuel, gasoil for diesel, naphtha for plastics and base oils for lubricants.

The technology and energy required to make gas-to-liquids work mean it has rarely been used to bring natural gas resources to consumers. The 34,000-barrel-a-day Oryx GTL, Qatar’s only operating gas-to-liquids plant, reached full power last year after hitting snags following its start in 2006. Oryx is a venture between state-controlled Qatar Petroleum and South Africa’s Sasol Ltd.

Ironed Out Kinks

Shell said it has ironed out a lot of the kinks of gas- to-liquids at a smaller plant it’s operated in Malaysia since 1993. Bintulu, which had early glitches, has been generating about $200 million a year in earnings. At 14,700 barrels a day, Bintulu is only about a 10th of the size of Pearl.

Alongside Pearl, Shell has a 30 percent stake in Qatargas 4, part of the world’s largest LNG complex, due to start exports in 2011. With oil prices at $70 a barrel, the two projects should generate more than $4 billion a year for Shell after revenue sharing with Qatar, Brown said.

Last year, Shell had a net income of $12.5 billion as New York oil futures averaged $62.09 a barrel. The company’s oil and gas production averaged the equivalent of 3.15 million barrels a day, according to company filings on Bloomberg.

In Nigeria, Shell’s share of production for its onshore fields dropped to 150,000 barrels a day after an oil spill shut a pipeline, Chief Financial Officer Simon Henry said last month. At full capacity, output from the fields is more than 350,000 barrels a day.

When Pearl and Qatargas 4 are both up and running they will add 350,000 barrels a day to Shell’s total production.

–Editors: Will Kennedy, Amanda Jordan

Mar/04/2010 00:01 GMT

To contact the reporters on this story: Stanley Reed in Doha, Qatar on sreed13@bloomberg.net; Robert Tuttle in Doha, Qatar at rtuttle@bloomberg.net.

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net.

SOURCE ARTICLE

However, Shell also said it was delaying the launch of Qatargas 4 by as much as 10 months, from the start of 2010 until the end of the year. Mr. Voser said the timetable had been disrupted by delays at other LNG projects in Qatar involving other big oil companies, such as Exxon Mobil Corp, Total SA and ConocoPhillips.

Qatar, the world’s biggest exporter of liquefied natural gas, is in talks with Royal Dutch Shell Plc to jointly invest in oil and gas projects outside the country, Qatar’s oil minister said.

Andy Brown said: “Qatargas is set to become the world’s premier LNG producer, and Shell is a pioneer in LNG spanning five decades.

Shareholders in the projects include Qatar Petroleum, ExxonMobil Corp., Total SA, Royal Dutch Shell Plc and ConocoPhillips.