Shell Eyes Second GTL Plant

Anglo-Dutch Shell and the Oman oil ministry have agreed to discuss the next steps for an integrated energy development  that could lead to Shell building and operating its second commercial scale gas-to-liquids plant. The gas would come from its own production there.

Shell upstream head Andrew Brown told the IP Week conference in London February 26 that the Pearl LNG plant in Qatar was successful and owed a lot to new proprietary technology: 3,500 patents were applied for. It produces almost pure diesel, which burns without emitting sulphur or particulates; and the economics are favourable compared with refining Brent owing to the low cost of gas there, he said.

He told NGW later that the plant in Oman, if it were built, would not be as large as Pearl GTL, as the gas supply would be smaller than at Qatar. He said it would be about a third of the size, but still one of the world's largest. And he said that although the initial investment cost is higher than LNG, the other standard option for stranded gas, he said the margins were good on diesel. Shell would be the operator.

BP is already producing gas from the Khazzan field and Brown said that could backfill the Oman LNG plant as well as supply industry and petrochemicals plants.

As well as engine fuel, GTL diesel also makes good fracking mud, Brown told the conference. "It changes the rate you can drill at," he said.

 Brown is due to leave the company this summer and so he might not be involved in the final investment decision (FID). He was sharing a platform with his predecessor at Shell's upstream division Malcolm Brinded, who was involved in the FID for the Prelude floating LNG project offshore Australia, which is yet to come on stream. Brown did not comment to NGW on the reasons for the delay, or say if they were below or above ground. "We are waiting to have enough gas to liquefy a cargo," he said.

Oman visit

Shell CEO Ben van Beurden and the Omani energy minister Mohammed bin Hamad Al Rumhy signed an interim upstream agreement that details funding and a work programme for 2019 for the development of gas resources destined for integrated projects to help meet the Sultanate of Oman’s growing need for energy. The other signatories were PDO , the Oman Oil Company (OOC) and Total.

The February 20 deal covers gas acreage in the northern part of Block 6, west of the existing Saih Rawl gas field that is operated by PDO. The project covers investments in gas exploration and production, in partnership with Total and OOC. The aim is to integrate the Shell and OOC share of the upstream project with the GTL plant now under discussion.