Natural gas has begun flowing through a subsea pipeline offshore Qatar into Pearl GTL, the largest gas-to-liquids (GTL) plant ever built, Royal Dutch Shell plc said Wednesday.

Once in full operation in 2012, Pearl GTL would be able to use 1.6 Bcf/d that is expected to be produced from the offshore North Field in the Arabian Gulf, which is said to contain as much as 900 Tcf of gas. The facility in Ras Laffan Industrial City is designed to generate up to 120,000 b/d of condensate and natural gas liquids (NGL) and 140,000 b/d of products that include gas oil, lubricant base oils and chemical feedstock.

Gas flow to Pearl GTL “is an important milestone…and we are on a clear pathway toward the start up of gas to liquids production,” Shell CEO Peter Voser said. Initial launch of Pearl GTL was in 2006, with testing under way in late 2009 (see Daily GPI, Nov. 24, 2009).

At a cost of around $19 billion, the giant complex is the largest single investment by Shell; Pearl GTL also is the largest gas project in the State of Qatar. Shell, which is funding 100% of the development costs, will operate the complex under a production and sharing agreement with state-owned Qatar Petroleum.

By itself Pearl GTL would add nearly 8% to Shell’s annual worldwide gas production and is the principal source of growth for the next year, Voser noted.

Sections of the Pearl plant, which will use chemical processes in the gas conversion process, will be started up progressively over the coming months, Shell said. Because the project’s cutting edge technology and record scale analysts have been following the start up to ensure all is going to plan.

“We’re on the verge of starting up a project that will be a foundation for Shell’s future growth for decades to come,” said Andy Brown, Shell’s Qatar Chairman. “For Qatar it means another way to generate revenues from gas reserves, in addition to selling pipeline gas or liquefied natural gas. It diversifies the country’s revenue streams and provides long-term income.”

In bringing Pearl GTL to production, Shell’s engineers relied built on more than 30 years of experience in GTL technology. Shell built the world’s first commercial-scale GTL plant in 1993 in Bintulu, Malaysia. Pearl’s output of GTL products will be 10 times more than Bintulu’s, a spokesman noted. Besides Bintulu, there are only two other GTL plants now in operation in South Africa and Qatar.

Analyst Michael Lynch of Gerson Lehrman Group noted that the Pearl project uses a Fischer-Tropsch process that was developed before World War II. In the latter part of the 20th century South Africa’s Sasol Ltd. substantially modified the technology, which allowed the producer to produce high-grade fuel from coal, said Lynch. A smaller GTL plant, Oryx, was placed in operation in Qatar in June 2006, also relying on gas from the North Field.

“With the great abundance of natural gas in the world and diminishing discoveries of crude oil, GTL looks to be an important source of liquid transportation fuel in the years to come,” said Lynch.

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