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Lloyds List: Soaring costs scupper Qatar’s gas-to-liquids export plant plans

Published: Feb 22, 2007

QATAR has dumped plans for building a gas-to-liquids export plant in favour of supplying gas to its own industrial facilities thanks to soaring costs, writes Martyn Wingrove.

Qatar Petroleum and US super-major ExxonMobil decided to halt their GTL plans, as costs have spiralled out of control, to pursue development of the Barzan gas project instead.

Both companies intend to develop the Barzan section of the giant North gas field in several phases, with the first scheduled to supply 1.5bn cu ft of gas per day to local industrial plants from 2012.

Qatar’s minister for energy and industry and chairman of Qatar Petroleum Abdullah al-Attiyah said: ‘The Barzan project is a very important strategic project for Qatar.’

He said other projects in the country are not under threat despite rising investment requirements and that another GTL plant under construction with Royal Dutch Shell will continue.

‘GTL technology is expensive and very technical. Technology for other projects is proven so no other projects are under threat,’ he said.

It is thought costs for Shell’s Pearl GTL complex in Ras Laffan Industrial City may have more than doubled to $18bn due to higher steel and equipment prices and the tightening supply of contracting resources.

Shell’s plant will convert 1.6 bcf of gas per day into around 140,000 bpd of synthetic oil products in two processing trains. The offshore infrastructure will also produce 120,000 barrels of oil equivalent per day of condensate, liquefied petroleum gas and ethane for export.

ExxonMobil’s GTL plant plans included building a facility for producing 150,000 barrels per day of synthetic oil products that would have been exported to Europe and North America.

The Houston-based group may develop the offshore field with a network of shallow water platforms, as it has with its al-Khaleej project.

There could be other phases of development at Barzan that ExxonMobil has the rights to participate in so more platforms and pipelines will be needed to recover the field’s gas reserves.

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