QATAR - Gas-To-Liquids Ventures.

There are three different gas-to-liquids (GTL) projects in Qatar, of which two have reached an advanced stage. They are expected to make Qatar a major exporter of zero-emission fuels.

The QP/Sasol: On July 10, 2001, QP and Sasol Synfuels International of South Africa 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 $800m and should be on stream by 2005, with construction of the plant in 2003. The plant will be located 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. of the US. The designs should be ready in March 2002. Foster Wheeler did the venture's feasibility study in 1997. The Industrial Bank of Japan (IBJ) was the financial advisor for the feasibility study phase. About ten banks, including IBJ, have recently been invited to submit proposals for the role of financial advisor for the plant. About 70% of the costs, i.e., $560m, will come in the form of debt.

QP holds 51% in the venture, with Sasol having 49%. Phillips Petroleum of the US withdraw from the venture in May 2000 and its 15% share was taken back by Sasol.

The gas will be supplied by ExxonMobil, the operator of the Enhanced Gas Utilisation (EGU) venture in the North Sea from which the US super-major will eventually produce 1,750 MCF/d (see Gas Market Trends). The GTL plant will be based on Sasol's slurry phase distillate technology.

On July 16, 1997, Sasol had signed an MoU with QP and Phillips to have the GTL plant built by 2002. It was then decided that the plant should produce 20,000 b/d of naphtha and distillates in two 10,000 b/d trains, requiring 200 MCF/d of gas to be supplied by QP.

Sasol's process, based on FT chemistry, was developed during the apartheid period in South Africa to counter a UN oil embargo. Now Sasol's and Mossgas' plants in South Africa produce 150,000 b/d of distillates out of gas and coal. But these plants have depended on heavy state subsidies. Sasol executives say a plant based on its SPDP needs $300m and only 30 BCM of gas. An LNG complex requires at least $2 bn and 180-240 BCM of gas. Sasol and Chevron in 2000 signed a final agreement to create a new firm, Sasol Chevron Holdings (SCH) to launch GTL projects on a global scale. SCH intends to invest more than $5 bn in GTL projects over the next 5-10 years

QP/ExxonMobil Project: In June 2001, QP and ExxonMobil signed a letter of intent to do a technical feasibility study for an 80,000 b/d GTL plant to be built at Ras Laffan as a JV. 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 considered a phased capacity: starting with 80,000 b/d to be converted from 800 MCF/d of dedicated gas, and later raising this to 100,000 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 2006. 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 and Conoco.