Qatar is Gas-to-Liquids global leader

In a first phase of operations, the plant will convert 330,000 cubic feet-a-day of gas taken from Qatar's offshore North Field into 24,000 b/d of diesel, 9,000 b/d of naphtha and 1,000 b/d of liquefied petroleum gas.

GTL technology was originally put to work in wartime Germany and later enhanced by South Africa when that country faced international trade embargoes..

While an expensive process, soaring oil prices in the last three years have made gas-to-liquids an increasingly attractive option for countries possessing large reserves of natural gas and looking for ways to monetise their dormant assets.

The markets for liquefied synthetic environmentally friendly fuels such as naphtha for chemical feedstock, lubricants and paraffin as well as sulphur-free diesel produced through GTL technology are growing as countries particularly in Europe impose increasingly stringent emission rules.

First of three GTLs

Oryx is the first of three GTL projects due to come on stream in Qatar. Larger developments scheduled to be commissioned are the Pearl GTL project with Royal Dutch Shell which is designed produce 140,000 b/d of products as well as a possible venture with ExxonMobil expected to have a capacity of 180,000 b/d.

Shell says it aims to have the first processing train of its Qatar operation up and running by the end of 2008 or early 2009 with a second train on stream two years after that.

Costs of developing new generation GTL plants are huge with the Oryx project billed at $900 million. Shell's development in Qatar is costing $6 billion. Over the long term though, the rewards could be considerable for investors as demand rises for cleaner-burning fuels.

According to Sasol's chief executive Patrick Davies the intention is for Oryx to raise its overall production with three trains to an eventual 100,000 b/d in partnership with the US' Chevron. Plans have also been outlined by Qatar petroleum, Sasol and Chevron for another integrated 130,000 b/d GTL facility involving construction of up to six processing trains.

World leadership

It seems likely that in a little over four years with all three plants on stream Qatar will be by far the largest producer of GTL products in the world. According to the emirate's energy and industry minister Abdullah Bin Hamad Al-Attiyah Shell's Pearl project alone will build the largest GTL plant in the world.

With Pearl and Oryx, Qatar's GTL production will reach 170,000 b/d. 'However, we do not intend to stop there and plans are in the pipeline to increase GTL production in Qatar to some 500,000 to 600,000 b/d of GTL products,' Al-Attiyah says.

At present only South Africa and Malaysia have commercial GTL operations but nothing on the scale of the intended Middle East production targets. Apart from Qatar, a number of other countries in the region are also considering developing gas to liquids projects including Algeria, Egypt and Iran.