Qatar Petroleum & Shell to Build World's Largest GTL Plant

Qatar Petroleum and Qatar Shell GTL Ltd have signed a Heads of Agreement for the construction of the world's largest Gas to Liquids (GTL) plant in Ras Laffan, Qatar.

The agreement was signed by His Excellency Abdullah Bin Hamad Al-Attiyah, Second Deputy Prime Minister and Minister of Energy and Industry of Qatar on behalf of Qatar Petroleum and by Sir Philip Watts, Chairman of the Committee of Managing Directors of the Royal/Dutch Shell Group of Companies. The HoA comprises full fiscal terms for the project that will be executed under an integrated Development and Production Sharing Agreement (DPSA). The project includes the development of a block within Qatar's vast North Field gas reserves, producing 1.6 billion cubic feet-per-day of gas.

Shell plans to invest around $5 billion to develop upstream gas and liquids facilities and an onshore GTL plant that will produce 140,000 barrels per day (bpd) of GTL products (primarily naphtha and transport fuels, with a smaller quantity of normal paraffins and lubricant base oils) as well as significant quantities of associated condensate and Liquefied Petroleum Gas. 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.

H.E. Al-Attiyah, said: "The signing of the Heads of Agreement for 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 under the wise leadership of His Highness the Emir of the State of Qatar. We are looking forward to a long-term and mutually-beneficial relationship with Shell".

Sir Philip Watts said: "We are grateful for the opportunity to participate in Qatar's gas development and diversification plans. Shell offers the technology and operational experience to make this exciting project a reality. 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. The project provides further evidence of Shell's leadership in GTL technology, and provides Qatar with an attractive alternative to commercialize their enormous gas reserves".

Malcolm Brinded, Managing Director of Royal Dutch/Shell Group of Companies and CEO of Shell Gas & Power added: "Shell is delighted to be working with Qatar Petroleum using this proven state-of-the-art technology. This milestone highlights Shell's commitment to support the long-term aspirations of Qatar. 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 industry".

Qatar's North Field is the world's largest natural gas accumulation, with reserves of over 900 trillion cubic feet. GTL offers a commercially-attractive and environmentally-friendly way of bringing gas reserves to market. It will provide a major export opportunity for Qatar, producing clean fuels for markets across the globe.