Royal Dutch Shell builds world's largest gas-to-liquid plant in Qatar

Published: 05-Mar-2010

Royal Dutch Shell Plc has constructed world’s largest gas-to-liquid plant with an investment of $19 billion.

The plant, named as ‘Pearl’ is expected to increase the output for the company, which dipped for a seventh year in 2009. Qatar, the arid Gulf state that’s become the biggest exporter of gas on ships, may account for 10% of the company’s production after Pearl and a liquefied natural gas project start deliveries next year.

As per sources, Pearl will start processing gas toward the end of this year and start delivering fuel in early 2011. At its best, Pearl will be capable of generating 140,000 barrels a day of liquid fuel and 120,000 barrels equivalent of ethane gas and condensate, a by-product that’s like a light crude oil.

Since the fuel Pearl will produce is purer than traditional crude-based products, Shell may be able to sell its output at a premium. Pollutants such as sulfur will be filtered out of the gas, making it well-suited eco conscious airlines or clean diesel for cars. Operating costs at Pearl will be about $6 a barrel. The company can reclaim the cost of building the plant through the production-sharing agreement it has with Qatar. With crude at $70 a barrel, Pearl would generate about $6 billion a year in profit for Shell and Qatar.

Apart from Pearl, Shell has a 30%stake in Qatargas 4, part of the world’s largest LNG complex, due to start exports in 2011. With oil prices at $70 a barrel, the two projects should generate more than $4 billion a year for Shell after revenue. Once Pearl and Qatargas 4 are both up and running, they will add 350,000 barrels a day to Shell’s total production.

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