FIRST it was petrochemicals, followed by liquefied natural gas (LNG). Now Qatar General Petroleum Corporation (QGPC) wants to cross a new technological frontier and make even more use of the vast gas reserves of the North Field - the world's largest non-associated reservoir. The planned gas-to-liquids conversion application could transform the international gas and refining business.

Research into ways of producing liquid fuel from non-oil hydrocarbons dates back to the 1920s. German scientists Franz Fischer and Hans Tropsch were the pioneers, experimenting with coal. They started by heating coal to produce carbon monoxide and hydrogen, which were then passed through catalysts to form liquids suitable for refining.

Others have since sought to advance the Fischer/Tropsch process, using gas as the primary feedstock. Royal Dutch/Shell, the US' Exxon Corporation and South Africa's Sasol have all claimed major breakthroughs, although none of them has so far found a commercial application for a proprietary technology.

However, that may be about to change. QGPC has already signed a memorandum of understanding with Sasol for a 20,000 barrel a day (b/d) plant at Ras Laffan, while Exxon has also held extensive negotiations with QGPC about setting up a larger plant.

Both ventures are receiving strong political support from state-owned QGPC, which sees the technology as a long-term way of making up for the fact that although Qatar's gas reserves are copious, its oil reserves are very limited. 'We are determined to make the most of our gas and to diversify its usage,' says Energy & Industry Minister Abdulla Bin Hamad al-Attiya. 'After many years of research, the technology holders believe that the commercial viability of both projects is very high.' QGPC officials stress that the two projects are not in direct competition. 'There is no conflict of interest,' says one. Nevertheless, Sasol has a head start in a race which could result in the construction of the world's first commercial gas conversion plant.

Sasol has already signed up the US' Phillips Petroleum as its partner on the planned two train facility and has contracted the UK office of Foster Wheeler to do a study. Sasol has been operating a 2,500 b/d plant in South Africa for the past four years and is aiming to use the same technology on the two 10,000 b/d trains at Ras Laffan. 'There will obviously have to be some upscaling in the train's size, although a four-field increase in size should be very manageable,' says the official. The scheme is expected to cost $500 million, take four years to complete and use gas feedstock which is already available.

The Exxon development is more ambitious. The US company is considering an 80,000 b/d facility, based on its AGC-21 technology. The process is in use on a 200 b/d pilot plant in the US. The price tag for this project will be much higher, at $2,000 million-3,000 million. One reason for the elevated cost is that the Exxon facility will require a dedicated gas supply from the North Field, necessitating a substantial investment in upstream infrastructure.

The stakes are high for both international companies. If they can prove commercial viability in Qatar, the gas-to-liquid technique could revolutionise the hydrocarbons industry by providing an easily transportable and environmentally friendly synthetic crude, from which middle distillates can be recovered. It could also expand the range of options for gas, and offer an alternative to LNG which still has high up-front costs and needs a 20-25 year sales commitment for viable development.