Although the technology is still in a state of evolution, Doha is already making a strong pitch to become the GTL capital of the world. Three international companies have so far signed agreements with Qatar Petroleum (QP) for more than 200,000 barrels a day (b/d) of GTL capacity. And more are on the way, drawn by the vast reserves of the offshore North field and Qatar’s strong track record of implementing major projects swiftly and within budget.
Doha’s fulsome support for the cutting-edge technology comes from the very top. Both Emir Sheikh Hamad bin Khalifa al-Thani and Energy & Industry Minister Abdulla bin Hamad al-Attiya are known GTL supporters. Their enthusiasm is not difficult to understand. GTL provides another means for commercially exploiting and diversifying the state’s abundant gas deposits.
‘We believe very strongly in the utilisation of our gas, but we don’t want all our eggs in one basket,’ Al-Attiya said on 20 February at the signing of the statement of intent with UK-based Shell International Gas for the latest GTL project. ‘We have NGL [natural gas liquids], LNG and pipelines and we now want GTL.’
The stakes are equally high for the international oil companies. Although the GTL concept has been around for more than 60 years, the race is now on to develop a world-scale commercial plant. Much is riding on the outcome: the technology could change the face of the global gas industry, producing ultra-clean middle distillate products such as diesel and naphtha, which are easily transportable by tanker.
Whether the growing number of Qatari GTL projects are in direct competition with each other is a matter of some debate. ‘No one has to race for the market, since the market is already out there, in the form of 1 billion tonnes a year of middle distillates,’ says one prospective foreign investor. ‘But, clearly, there is a limit to how many can be implemented simultaneously in any one year and in any one place.’
At QP, officials are keeping an open mind. ‘One has to be prudent about getting into such an exotic industry, especially when catalysts require improvements and the capital costs are so high,’ says one. ‘Ultimately, commercial considerations will decide [their fate].’
In recent years, significant advances have been made in catalyst development and reducing capital costs. Most of the plants being talked about involve the use of next-generation catalysts and reactor vessels. All are scaled-up versions of either commercial, semi-commercial or pilot projects. For instance, Shell is looking at building a 100,000-b/d plant using its proprietary Shell middle distillates synthesis (SMDS) process, which has been in operation on a 12,500-b/d facility in Malaysia since 1993.
The experience of LNG technology is often taken as an example of how the GTL process could develop. Over the past 25 years, the size of LNG trains has quadrupled, forcing down capital and operation costs. The hope is that GTL will follow a similar path. If it does, then Qatar will surely have played its part.