DOHA, 21 October 2003 — Qatar is close to signing gas to liquid fuel projects worth more than $20 billion, Energy Minister Abdullah Hamad Al-Attiya told AFP yesterday after wrapping up deals worth $5 billion with Royal Dutch Shell and 12 billion with ExxonMobil.
“We are negotiating these GTL projects with Exxon Mobil, Marathon, ConocoPhillips and Sasol-Chevron with investments estimated at over $20 billion,” Attiya said after.
“The negotiations are at an advanced stage. The agreements could be concluded at any moment because Qatar has adopted a flexible economic policy,” he added.
State-run Qatar Petroleum (QP) and Royal Dutch Shell sealed earlier in the day a $5 billion heads of agreement (HOA) to build the world’s biggest plant to convert natural gas into liquid fuels.
Attiya, who is also chairman of QP and the OPEC oil group, signed with Sir Philip Watts, chairman of Royal Dutch Shell Group, on behalf of Qatar Shell GTL Limited, at a public ceremony in Doha.
The accord envisages the construction of a gas-to-liquid (GTL) plant at Ras Laffan in the Gulf desert emirate to produce naptha and environmentally friendly diesel fuels.
“Shell plans to invest around five billion dollars to develop upstream gas and liquids facilities and an onshore GTL plant that will produce 140,000 barrels per day (bpd) of GTL products,” a joint statement said.
“The project will be developed in two phases with the first phase operational between 2008 and 2009 producing around 70,000 bpd of GTL products. The second phase will be completed less than two years later.”
Attiyah said: “This first world-scale project is an important milestone in establishing Qatar as the GTL capital of the world and is supporting the economic development of Qatar.” “Not only are we building the largest GTL plant of its kind the world has ever seen, but we will be producing a new range of clean and versatile products which offer significant environmental and performance benefits,” said Watts.
Shell’s Managing Director Malcolm Brinded added: “The project will develop significant gas and condensate reserves, deliver ultra-clean products and is economically robust.
“As such it heralds the dawn of a new indsutry.”
According to Qatar’s Energy Ministry the contract will be finalized in the second half of 2004. A letter of intent was signed last year. GTL technology is relatively untested, but energy companies are hopeful that the new fuels it produces could become increasingly popular as demand grows for less polluting diesel vehicle engines.
Shell has operated the first GTL facility of its kind in Bintulu, Malaysia, since 1993, producing 12,500 bpd of transport fuel and speicality products.
Last week QP signed a HOA for with Exxon Mobil to supply the growing US domestic market. That $12 billion deal foresees liquefied natural gas (LNG) production of 15.6 million tonnes a year, or about two billion cubic feet (56.6 million cubic meters) per day from Qatar’s giant North Field.
Delivery of LNG to the US is targeted to begin in 2008 2009 and will extend for over 25 years. Doha and foreign partners have already pumped $15 billion of LNG ventures into the North Field, the world’s largest non-associated gas field.
It has proven reserves of over 900 trillion cubic feet (tcf), or 25.485 trillion cubic meters. That is more than 15 percent of the total proven global gas reserves, and enough to last the tiny Gulf state about 250 years.
Over 26 tcf of the reserves will be dedicated to the Exxon-QP project.
Qatar is set to be the world’s biggest exporter of LNG by 2010 with an annual output of 30 million tons and is pushing to take production to 45 million tons a year.
Doha today exports about 15 million tons of LNG a year, mainly to Japan and South Korea. Qatar has only about 150,000 citizens — plus half a million expatriates — who are set to become among the world’s richest.
It also has recoverable oil reserves of 15.2 billion barrels — or 1.4 percent of the world’s total reserves, most of which is exported to Asia.
