QATAR - Gas-To-Liquids Ventures.

There are six different gas-to-liquids (GTL) projects in Qatar, of which one is under execution and one is in an advanced stage. If they all materialise, they would produce between 364,000-549,000 b/d and thus make Qatar the world's biggest exporter of zero-emission fuels.

Iran is closely watching the way the GTL projects are being proposed and executed, because it intends to have similar projects. Iran is also watching the way Qatar is becoming a leading exporter of LNG.

The QP/Sasol - Oryx GTL: On July 10, 2001, QP (51%) and Sasol Synfuels International of South Africa (49%) signed a final JV agreement for the first GTL project in the Middle East. This will process 330 MCF/d of lean gas to produce 24,000 b/d of ultra-clean fuel, 9,000 b/d of naphtha and 1,000 b/d of LPG. The project will cost about $900m and should be on stream by late 2005, with $675m EPC contract awarded in early 2003 to Technip-Coflexip. The plant is being built at Ras Laffan, a new industrial zone north of the Qatari peninsula.

The venture's $30m FEED contract was awarded in early July 2001 to the UK office of Foster Wheeler Corp. The designs were submitted to Oryx in March 2002. Foster Wheeler did the venture's feasibility study in 1997. The EPC contractor in mid-2003 gave Air Products & Chemicals of the US a turnkey order to supply and install two 3,500 t/d oxygen units at the plant.

The gas will be supplied by ExxonMobil, the operator of Al Khaleej Gas (AKG) project in the North Sea from which the US super-major will eventually produce 1,750 MCF/d (see Gas Market Trends). Under a long-term contract signed on March 13, 2003, AKG will deliver 330 MCF/d. The GTL plant will be based on Sasol's slurry phase distillate technology.

In a second phase, to be launched if this proves feasible after the plant goes on stream, will raise Oryx's capacity to 80,000 b/d. The $700m financing of the first phase in a 14-year facility given by a number of key banks earlier this year became a benchmark for the other GTL projects in Qatar. The financial adviser for Oryx GTL is the Royal Bank of Scotland (see background in Vol. 57, DT No. 10).

QP/ExxonMobil Project: In early 2003, Fluor Daniel of the US received a letter of intent to do the FEED work for Qatar's second GTL venture, 102,000 b/d, which is between QP and ExxonMobil. Fluor did a preliminary study on the project. The FEED contract, which also contains an option for Fluor to provide the PMC, was to be signed once QP and ExxonMobil

have resolved outstanding issues on setting up the JV company.

In June 2001, QP and ExxonMobil signed a letter of intent to do a technical feasibility study for the plant, to be built at Ras Laffan. ExxonMobil then said the study will "indentify and determine potential synergy opportunities" with other projects and infrastructure in Qatar. In 1997 QGPC and Exxon had signed an MoU to establish the GTL venture based on Exxon's "revolutionary" Advanced Gas Conversion (AGC-21) process. Exxon Al Khalij, Exxon's Middle East unit based in Abu Dhabi, had been working on the project since 1994. ExxonMobil and QP then considered a phased capacity: first starting with 80,000 b/d to be converted from 800 MCF/d of dedicated gas, and later raising this to 102,000 b/d from 1,000 MCF/d of gas. The products will be mostly top quality diesel and could include some naphtha and gasoline, all free of any impurity like sulphur and aromatics. The total costs for the full capacity could be over $4 bn and the plant may be on stream by 2007 or 2008. A favourable Exxon-QGPC feasibility study was completed in 1996.

Exxon's AGC-21 process is used in a prototype 200 b/d plant at Baton Rouge, Louisiana. This is a version of the Fischer-Tropsch chemistry, conceived in the 1920s by German scientists, which has been the basis of various GTL processes developed by Shell in a plant at Bintulu (Malaysia), Sasol and Mossgas plants in South Africa, and the Mobil-developed gas-to-methanol-to-gasoline plant in New Zealand bought by Fletcher Challenge. Other companies developing processes based on the FT chemistry include BP, Statoil, Conoco and Marathon.

QP/Shell Project: In February 2002 QP and Shell International Gas signed a letter of intent to study the feasibility of an integrated gas/GTL project with a 140,000-150,000 b/d plant to be built at Ras Laffan. This means Shell will develop a portion of the North Field, which it discovered in 1970, to supply the GTL plant. Shell, one of the main foreign E&P operators in Qatar until the early 1970s, opened an office in Doha on Nov. 1, 2002 to support the project and pursue other ventures in this emirate. Shell will use its SMDS process.

QP/Conoco Project: In late 2001 Conoco (now ConocoPhillips) and QP signed a letter of intent for an integrated $9 bn project for the US firm to develop a portion of the North Field and feed a GTL plant at Ras Laffan which will ultimately have a capacity of 240,000 b/d.

ConocoPhillips is QP's partner in an expanding petrochemicals business in Qatar. The US company believes world demand for GTL products will be strong in the next decade, particularly in the US and other OECD markets.

QP/Marathon Project: On June 24, 2003, QP and Marathon Oil of the US signed a letter of intent for a 100,000-120,000 b/d GTL plant at Ras Laffan. This is to be an integrated project, with Marathon to develop a portion of the North Field to provide the gas.

Proposed to be on stream in 2008, the plant's output would consist of 70% diesel and 30% naphtha (the feedstock to produce gasoline). The whole project would cost about $4.3 bn.

QP/Sasol-Chevron Project: The Sasol-Chevron GTL business and QP have signed a letter of intent for an 80,000 b/d plant at Ras Laffan. Sosol-Chevron is building a GTL plant in Nigeria.

Ivanhoe Energy of Canada was promoting a 185,000 b/d GTL project at Ras Laffan and an initial feasibility study for this was made, with Japanese companies to play a prominent role in the project. But it said in late May 2003 that it had terminated negotiations with QP. Its CEO E. Leon Daniel said: "We are very disappointed that negotiations have not been successful particularly with the amount of time and money invested..."

Ivanhoe is negotiating with Egypt a GTL plant to be built at El Hamra, west of Alexandria. This would have a capacity of 45,000 b/d, to be doubled later on. The company had been negotiating with the Egyptians for three years before it concentrated on Qatar. But after its Qatar project was cancelled, it was invited by the Egyptians to resume negotiations.

Qatar's Energy Minister Abdullah Al Attiyah is a firm believer in the GTL business. At a Dubai conference in March 2002, he said: "We have been working very hard with our partners to reduce the cost of GTL production. It used to be $20 a barrel. Now it is down to $10-12 a barrel".

Qatar is having the Gulf region's first helium plant at Ras Laffan to be owned by Qatargas and RasGas and to produce 660 MCF/y. Air Liquide of France gots the $115m EPC contract for this on May 21, 2003. Total and Japanese firms are studying a 2,500 t/d di-methyl ether (DME) plant in Qatar to be on stream by 2006/07