Shell aims for 'New Nigeria' at Qatar's $19bn plant (http://www.businessdayonline.com/index.php?option=com_content&view=article&id=9029:shell-aims-for-new-nigeria-at-qatars-19bn-plant&catid=85:national&Itemid=340)
...to bolster output Anglo Dutch oil giant Shell is aiming to make up for its mounting losses in Nigeria via a $19 billion gas to liquids plant in the sandy desert of Qatar in the Middle East, according to Bloomberg news.Shell spent $19 billion, triple the original estimate, to build the world's largest gas-to-liquids plant in Qatar and now, it's pay-off time and the company says the project may generate $6 billion a year. Shell's work in Qatar is "like creating a new Nigeria," Andrew Brown, the company's executive vice president for the country, said in an interview in the capital, Doha.Shell needs the Qatar plant, known as Pearl, to bolster output, which fell for a seventh year in 2009 in part because rebel violence hampered oil ventures in Nigeria. In Nigeria, Shell's share of production for its onshore fields dropped to 150,000 barrels a day after an oil spill shut a pipeline, Chief Financial Officer Simon Henry said last month. At full capacity, output from the fields is more than 350,000 barrels a day. When Pearl and Qatargas 4 are both up and running they will add 350,000 barrels a day to Shell's total production exactly the same production capacity at Shell's Nigeria onshore fields.Qatar, the arid Gulf state that's become the world's biggest exporter of gas on ships, may account for 10 percent of the company's production after Pearl and a liquefied natural gas project start deliveries next year. Gas-to-liquids technology, a relatively expensive way to make diesel and jet fuel, makes more sense given today's disparity between natural gas and oil prices. Converted into barrels of oil, gas is less than half the price of crude, which doubled to near $80 in the last year. At full capacity, Shell said Pearl will churn out 140,000 barrels a day of liquid fuel and 120,000 barrels equivalent of ethane gas and condensate, a by-product that's like a light crude oil. "GTL is a very expensive, energy intensive process," said Iain Anderson, an analyst at brokers Brewin Dolphin Holdings Plc in London. "But the result you get is fantastic." Pearl could be paid off in five years, Anderson said. Since the fuel Pearl will produce is purer than traditional crude-based products, Shell may be able to sell its production at a premium. Pollutants such as sulfur are stripped out of the gas, making it well-suited to green-minded airlines or clean diesel for cars. Operating costs at Pearl will be about $6 a barrel, Brown said, and the company can reclaim the cost of building the plant through the production-sharing agreement it has with Qatar. With crude at $70 a barrel, Pearl would generate about $6 billion a year in profit for Shell and Qatar, he said.
Source: Businessday :: News you can trust (http://www.businessdayonline.com/index.php?option=com_content&view=frontpage)