Shell considering GTL plants in Egypt, Trinidad

Darius Snieckus
OGJ Online
BINTULU, Malaysia -- Shell International Gas Ltd. will consider Egypt and Trinidad as possible future sites for high-capacity gas-to-liquids (GTL) plants as part of a major investment program in that emerging energy market.

The announcement, made at Shell's flagship Middle Distillate Synthesis (SMDS) facility in Bintulu, Malaysia, builds on the company's earlier plans to undertake similar studies in Indonesia and Iran.

Shell said the program could result in an investment of $6 billion in the construction of several GTL plants over the next 10 years.

SMDS�a three-stage process developed at Shell International Gas Ltd.'s 12,000 b/d Bintulu plant that transforms natural gas into "ultra clean" middle distillates products like naphtha, gasoil and kerosine�has "proved to be an attractive alternative to liquefied natural gas (LNG) and we are actively seeking opportunities around the world for more second-generation SMDS facilities," said Jack Jacometti, vice-president of SMDS global development.

"These four studies could result in total development costs of more than $6 billion," he said, "and would offer substantial benefits in terms of economic, social and environmentally sustainable development with an already proven technology."

Shell's Bintulu GTL facility, which uses gas from fields offshore Sarawak, has only been back on flow since June, after a 2� year, $5 million safety upgrade.

In 1997 the plant's air separation unit suffered a massive explosion which Shell said was caused by a build-up of minute atmospheric particles from forest fires that ravaged the island that year.

In Egypt, Shell, Egyptian General Petroleum Corporation (EGPC), and the Egyptian Oil Ministry have initialed a development protocol deal for a 75,000 b/d GTL conversion facility outfitted with SMDS technology, and "at least" one LNG train producing some 500 MMscf," to development a tranche of the country's "uncommitted" gas reserves.

The protocol would be a stepping stone toward a gas supply agreement and joint development agreement to bring an LNG plant into operation by mid-2004, and an SMDS facility by late-2005.

Jacometti said that "what [Shell is] really targeting is to get three to four [SMDS] prospects off the ground by getting them to the point of Final Investment Decision"�Shell's term for an "irreversible" commitment to a project. He stressed, however, that the company was only in "second stage" discussions with relevant parties including the governments of Egypt, and Trinidad and Tobago, and "prospective partners."

"All the big players are very keen to get [GTL] off the ground," Jacometti added. "We all see it as an emerging industry and the next stage to LNG and want to repeat this success we have had we LNG." He noted that ExxonMobil had invested roughly $400 million in GTL R&D in the last year, while BP had announced plans to build a 300 b/d GTL pilot plant in Alaska.

Separately, Shell is conducting a feasibility study for a 75,000 b/d conversion facility in Trinidad and Tobago, which could be onstream "by 2005-06" and would double current middle distillate exports from the country.

Shell said the plant would need a gas intake of around 600 MMscf/d�roughly equivalent to a large LNG train's gas input.

Catalyst developed
SMDS was an outgrowth of Shell's exploratory research into alternative sources of energy in the early-1970s. In 1973, the company embarked on a program that sought to modernize Germany's Fischer Tropsch synthesis of synthesis gas into liquid hydrocarbons.

Shell's GTL pilot project, launched in 1983, led to the identification of Bintulu�which it operates in a 65:35 joint venture with Malaysian state oil company Petronas�as a site for its SMDS facility.

Shell said what has allowed it to move high-capacity GTL plants toward commercial viability has been the development, in Amsterdam, of a proprietary cobalt-based catalyst for the facility's reactors which effectively doubles efficiency.

Shell claims the catalyst, along with "economies of scale and the commercial experience of Bintulu," has cut capital expenditure from $50,000 b/d to around $20,000 b/d, making a 75,000 b/d plant an "attractive proposition" even with crude prices down to $15/bbl.

With large-volume daily output levels now possible through the 5-7% improvement in the catalyst, the company is no longer reliant on the production of specialty products to steady the economics of future GTL plants.

Shell said one appeal of GTL to the global oil and gas industry is the technology's ability to bring otherwise non commercial "stranded" gas accumulations to the marketplace, especially from remote regions such as onshore Siberia, the Former Soviet Union, China, and offshore Canada, Australia, and Southeast Asia.

A recent report by UK oil and gas consultant Smith Rea Energy Ltd. said using GTL to develop large-scale stranded gas deposits onshore could "add significantly to world fossil fuel reserves" and shift the balance of global reserves away from being "so heavily weighted toward the Middle East."

Related Articles

Watching Government: Change in Saudi Arabia?

06/15/2015 International observers are still considering the extent, if any, of changes since Salman bin Abdulaziz Al Saud became Saudi Arabia's king in Janua...

A hundred-year Hail Mary?

06/15/2015 Comparing it to a can't-look-away train wreck, Reuter's financial columnist James Saft, in a June 2 article, viewed the recent issue of 100-year bo...

ExxonMobil’s Liza-1 well encounters oil offshore Guyana

05/20/2015 Esso Exploration & Production Guyana Ltd., a unit of ExxonMobil Corp., reported an oil discovery on Stabroek block 120 miles offshore Guyana.

Kizomba Satellites Phase 2 off Angola starts oil productionwise advantaged projects to the south.

05/11/2015 Esso Exploration Angola (Block 15) Ltd., a subsidiary of ExxonMobil Corp., has started oil production ahead of schedule at the Kizomba Satellites P...

LNG export limits violate US free trade tradition, ExxonMobil executive says

04/27/2015 The US should remove the national interest demonstration requirement for LNG exports to countries with which it does not have a free-trade agreemen...

LNG export limits violate US free trade tradition, ExxonMobil executive says

04/21/2015 The US should remove the national interest demonstration requirement for LNG exports to countries with which it does not have a free-trade agreemen...

ExxonMobil resumes drilling from Point Thomson near ANWR

03/23/2015 Following years of legal wrangling, ExxonMobil Corp. has resumed drilling in the high-pressure Point Thomson gas-condensate field on Alaska's North...

Chevron, Shell among most active bidders in central gulf sale

03/18/2015 Chevron Corp., ExxonMobil Corp., Royal Dutch Shell PLC, and Statoil ASA mostly led the way as Gulf of Mexico central planning area Lease Sale 235 d...

Tillerson: Sound policies needed to buoy N. American energy revolution

03/13/2015 The US government needs to adjust its energy policies to ensure the country realizes all the benefits of the new era of energy abundance, said Rex ...
White Papers

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by
Available Webcasts

On Demand

OGJ's Midyear Forecast 2015

Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.


Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!


Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected