Gas-to-Liquids (GTL) Projects
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Qatar Petroleum is actively pursuing a number of world-scale gas-to-liquids conversion projects for the production of synthetic fuels and base oil stocks. The projects are all integrated with offshore development to supply the large amounts of gas needed for these projects. These are active business opportunities that are being pursued, but the status of each of the projects is still at the preliminary stage. A brief summary for each project is given.
Oryx GTL Project
All major project agreements have been signed with the relevant parties. Oryx GTL Ltd. was established at the end of January 2003 as a JV company between Qatar Petroleum (51%) and Sasol (49%). The design capacity of the project is 34,000 BPD of gas-to-liquid fuel. The EPC contract was awarded to Technip and the 33-month contract is being executed from their Rome office. The project reached financial close on 18 March 2003 with EPC contract effective from 19 March 2003.
His Highness Sheikh Tamim Bin Hamad Al Thani, the Heir Apparent, on 7 December 2003 laid the Foundation Stone for the Middle East’s first gas-to-liquids plant.
The GTL plant will be ready for start-up in December 2005 and first product will enter the international market during the second quarter of 2006.
QP and Sasol Chevron have signed a Memorandum of Understanding (MOU) for the ORYX GTL Expansion project and have discussed the technical and business principles that will support the planned increase in the output of the foundation plant to 100,000 bbl/day. This will involve defining the feasibility of a three (3) train, 65,000 bbl/day facility with an expected start up by 2009.
Pearl GTL
Shell’s GTL is an integrated project which will develop about 1.6 BSCFD of North Field gas to produce approximately 140,000 BPD of synthetic fuels and base oils. The project will be developed in two phases with the first phase operational in 2009, producing around 70,000 bpd of GTL products with the second phase to be completed less than two years later. Qatar Petroleum and Qatar Shell GTL Limited (Shell) signed the Development and Production Sharing Agreement (DPSA) for Pearl GTL in July 2004.
The first of two appraisal wells in the North Field were drilled in February 2004 and the Front End Engineering and Design (FEED) contract was awarded to JGC Inc. of Japan in March 2004.
Sasol Chevron
Sasol Chevron submitted a Project Profile Proposal to QP in July 2002 for an integrated upstream/downstream GTL project to produce 120,000 BPD of GTL product in two phases. The project will produce naphtha and diesel as the primary products. A Statement of Intent was signed for this project in November 2002.
As part of its ongoing project work, Sasol Chevron submitted a Scoping Study to QP in June 2003. Progress has yet to be made on commercial issues to enable further progress with the technical development of the project.
Initial indications were for startup of the project by 2010, but a revised startup date will be produced when the next round of negotiations with Sasol Chevron commences.
QP and Sasol Chevron have also signed a Letter of Intent (LOI) to examine GTL Base Oils opportunities in Qatar.
QP and Sasol Chevron have agreed to pursue the opportunity to develop a 130,000 bbl/day upstream/downstream integrated GTL project based on the Sasol Slurry Phase Distillate Process and utilising resources from the North Field. This will involve defining the feasibility of a six (6) train facility with an expected start up by 2010. These efforts will lead to the establishment of a Heads of Agreement (HOA) for the project.
ExxonMobil
ExxonMobil GTL project is for the production of synthetic GTL products in excess of 150,000 BPD. Feedstock for the GTL Plant will be provided from two wellhead platforms; approximately 1.8 BSCFD will be required to yield the target GTL production. The project will produce base oil stocks in addition to the synthetic fuels.
Onshore gas treatment and NGL recovery plants will benefit, to the maximum extent possible, from the existing RasGas infrastructure to reduce the overall project cost. LPG, condensate and sulphur storage/loading will most likely be shared with other ongoing projects at Ras Laffan.
The HOA signed in July 2004 specifies the principal terms for the project that will be defined in a Development and Production Sharing Agreement (DPSA). The term of the DPSA will be 25 years from the start of production, which is expected to commence in 2011.
ExxonMobil will drill an appraisal well for the GTL project in 2004, and will supplement the extensive preliminary front-end engineering and design (pre-FEED) undertaken earlier. FEED is expected to begin upon execution of the DPSA.
Marathon
The Marathon GTL project will produce approximately 120,000 BPD of naphtha and diesel. The project will consist of two trains of equal capacity. Phase I first commercial production is planned for 2010. Offshore development is based on two unmanned wellhead platforms and two wet scheme pipelines configuration.
Marathon is considering introducing shareholders to the project; shareholders will include PetroCanada, Occidental and the Offset Group. Details regarding the venture partners will probably be concluded during 2004.
The project will be executed on a Production Sharing Agreement basis. Marathon’s pre-FEED work was completed during the last quarter of 2003 and it is expected that commercial negotiations will commence during early 2004.
ConocoPhillips
ConocoPhillips is planning to develop its GTL project in two phases, each producing approximately 80,000 BPD of GTL products - naphtha and diesel using CoPOX technology. Two wellhead platforms with adequate number of wells will provide the required feedstock for the GTL plant.
The company completed a feasibility study that was submitted to QP mid 2003. A Statement of Intent to proceed with the project was signed with QP in December 2003. The company intends to proceed with pre-FEED work during 2004. Startup of the first phase of the plant is scheduled for 2010. The project is structured on the basis of a Production Sharing Agreement, as with all other large-scale GTL projects.
The company has successfully completed the construction of a 400 BPD semi-works plant at its refinery in Ponca City, Oklahoma and commissioning of the plant was well underway at the end of December 2003. ConocoPhillips will demonstrate its process during 2004 and it expects to be able to commence commercial negotiations in 2004 also.
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