MARTIN FLANAGAN
CITY EDITOR
RUSSIAN gas monopoly Gazprom and British-Dutch oil giant Royal Dutch Shell are thinking about building a gas-to-liquids plant in western Siberia in a project potentially worth $8 billion (£4.3bn), Gazprom said yesterday.
“We are considering building a 12 billion cubic metre gas-to- liquids [GTL] plant in Nadym together with Shell,” Gazprom’s deputy chief executive, Alexander Ryazanov, told a news conference.
Shell confirmed it had entered into preliminary talks with Gazprom, but declined to put a potential value on the project.
A Shell spokesman said: “We are in discussion with Gazprom over a preliminary feasibility study for a gas-to-liquids project in Russia.”
The estimate Ryazanov gave for investment in the project, Russia’s first GTL plant, would put it on a par with Shell’s proposed investment in the world’s biggest GTL plant in Qatar.
Analysts have speculated the cost of the Pearl project in Qatar could hit $8bn, up from an estimate provided by Shell in 2003 of $5bn.
Shell has said a final investment decision on Pearl, a joint venture with Qatar Petroleum, is due this year.
GTL technology processes natural gas into clean oil products such as low-sulphur diesel, which is increasingly in demand to meet tightening restrictions.
Gazprom said a move into GTL would make sense, as the cost of pumping gas from some fields was rising as output from those fields declined.
The first commercial-scale GTL project was launched this month in Qatar, in a joint venture between Qatar Petroleum and South Africa’s Sasol.
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