Shell Awards Kellogg Brown & Root Major GTL Project

Kellogg Brown & Root, and its joint venture partner, JGC Corporation, have been selected by Shell Gas & Power as contractor for its first large scale Gas to Liquids (GTL) project. The joint venture's contract covers the definition of the engineering design. The location of the first project has yet to be determined, but an investment decision is expected by the end of 2002. Shell intends to commit to up to four projects by the end of 2010.

"This is a very important step forward in realizing Shell's plans to commit to four large scale gas to liquids plants by the end of 2010. We are delighted to be working with the KBR/JGC joint venture as both companies have considerable experience with the technologies involved in this emerging industry," said Niels Fabricius, Shell's VP SMDS Projects.

"Kellogg Brown & Root has a long and successful history of working with Shell, and we are delighted about extending our involvement to gas-to-liquids. This is an expanding sector of the industry that has tremendous potential for success," said Randy Harl, president and chief executive officer, Kellogg Brown & Root. "We also look forward to continuing our great working relationship with our joint venture partner, JGC."

The project will use Shell's proprietary GTL technology, the Shell Middle Distillate Synthesis (SMDS) process. This process converts gas intro ultra clean liquid products that are free from aromatics and sulfur. Recent technical advances in the SMDS technology have created potentially attractive opportunities for the commercialization of large gas reserves in an environmentally sustainable manner. The next generation facility will have a capacity of 75,000 b/d (barrels per day), requiring a gas intake of around 600 mmscf/d (million standard cubic feet per day) – roughly equivalent to the gas intake of a large liquefied natural gas (LNG) train.

The definition phase activities will be executed over a period of 18 months at the offices of M.W. Kellogg Ltd., Kellogg Brown & Root and JGC's affiliate company in London, with support from Kellogg Brown & Root in Houston and JGC in Yokohama. At peak, 175 professionals will be assigned to the project.

The Kellogg Brown & Root / JGC joint venture has broad experience in all the constituent technologies involved in GTL, having executed large projects for Shell relating to the commercialization of gas reserves for 22 years. KBR and JGC are leading service providers in the industry, having worked together on more than 20 LNG projects, many in remote pioneer greenfield locations. The joint venture's capabilities in building next generation technology plants will also be an asset to the SMDS 2 project . JGC built Shell's existing 12,000 b/d SMDS plant in Bintulu, Malaysia.