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Qatar-Shell plant EPC deal by 2006 Qatar-Shell plant EPC deal by 2006

The Peninsula – 05/07/2004

DOHA: The upcoming $5bn Qatar-Shell gas-to-liquids (GTL) project hopes to award the engineering, procurement and construction (EPC) contract in early 2006, according to Robert Dakers, Shell’s country manager and vice-president in Qatar.

Dakers told a Doha-based magazine Abode in an interview that currently front-end engineering and design (Feed) work was being conducted by Japanese contractors JGC at the engineering consultant M W Kellog’s London office.

Abode released excerpts of the interview in advance. The Qatar-Shell joint venture envisages to produce 140,000 barrels per day (bpd) of various GTL fuels in two phases to become the world’s largest GTL plant.

The first phase is expected to go on stream in 2009 churning out 70,000 bpd, while the second phase is due for commissioning within two years.

The project has made much progress offshore with seismic acquisition of the vast North Field, Dakers said. The first of the two appraisal wells had been drilled to confirm gas acquisitions. The second well is due for drilling this year.

Blocks in the North Field for gas extraction and production have been notionally allocated. “It will be an integrated upstream-downstream project”.

The downstream project is as large and complex as a refinery, covering the equivalent of 450 football fields. It will require 2,800 items, four to five times as many as liquefied natural gas (LNG) plant and will be by far the biggest single construction project ever undertaken in Qatar.

The plant is to be located in the Ras Laffan Industrial City, 80kms north of Doha, next to where some of the world’s giant LNG producers like Qatargas and RasGas and emerging piped gas major Dolphin project have their installations based.

Demand for GTL products is estimated at a huge 2,000 million tonnes per annum globally with the industry witnessing a one to two per cent growth. Dakers admits Qatar-Shell’s proposed 140,000 bpd production “will just be a drop in the bucket”.

Shell is doing a lot of work to produce and promote GTL fuels. In Germany, the company is collaborating with automobile makers Volkswagen, and has conducted a five-month test of the clean fuel (diesel) on a fleet of VW golf cars.

In the UK, Shell is coordinating with DaimlerChrysler, and has successfully completed a three-month trial of GTL diesel on a London bus.

Similar trials are being planned or ongoing in the US and Japan using GTL neat or in a blend with standard diesel, to demonstrate that it is an effective alternative fuel for both light and heavy vehicles.

In Thailand, Shell Pura diesel containing GTL fuel has been on sale since the past two years capturing significant market share of the diesel sold there.

Shell has a GTL plant in Bintulu, Malaysia, which currently produces 14,700 bpd.

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