20-10-03 Qatar is close to signing gas to liquid fuel projects worth more than $ 20 bn, Energy Minister Abdullah Hamad Al-Attiya told after wrapping up deals worth 5 bn with Shell and 12 bn with ExxonMobil.
"We are negotiating these GTL projects with ExxonMobil, Marathon, ConocoPhillips and Sasol-Chevron with investments estimated at over $ 20 bn," Attiya said. "The negotiations are at an advanced stage. The agreements could be concluded at any moment because Qatar has adopted a flexible economic policy," he added.

State-run Qatar Petroleum (QP) and Shell sealed earlier in the day a $ 5 bn heads of agreement (HoA) to build the world's biggest plant to convert natural gas into liquid fuels. Attiya, who is also chairman of QP and the OPEC oil cartel, signed with Sir Philip Watts, chairman of Shell, on behalf of Qatar Shell GTL Limited, at a public ceremony in Doha.
The accord envisages the construction of a gas-to-liquid (GTL) plant at Ras Laffan in the Gulf desert emirate to produce naphtha and environmentally friendly diesel fuels.

"Shell plans to invest around $ 5 bn to develop upstream gas and liquids facilities and an onshore GTL plant that will produce 140,000 bpd of GTL products," the companies said. "The project will be developed in two phases with the first phase operational between 2008 and 2009 producing around 70,000 bpd of GTL products. The second phase will be completed less than two years later."
Attiyah said: "This first world-scale project is an important milestone in establishing Qatar as the GTL capital of the world and is supporting the economic development of Qatar."

"Not only are we building the largest GTL plant of its kind the world has ever seen, but we will be producing a new range of clean and versatile products which offer significant environmental and performance benefits," said Watts.
Shell's managing director Malcolm Brinded added: "The project will develop significant gas and condensate reserves, deliver ultra-clean products and is economically robust. Assuch it heralds the dawn of a new industry." According to Qatar's energy ministry the contract will be finalised in the second half of 2004. A letter of intent was signed last year.

GTL technology is relatively untested, but energy companies are hopeful that the new fuels it produces could become increasingly popular as demand grows for less polluting diesel vehicle engines. Shell has operated the first GTL facility of its kind in Bintulu, Malaysia, since 1993, producing 12,500 bpd of transport fuel and speciality products.
QP signed a HoA for with ExxonMobil to supply the growing US domestic market. That $ 12 bn deal foresees LNG production of 15.6 mm tpy, or about 2 bn cf (56.6 mm cm) per day from Qatar's giant North Field. Delivery of LNG to the US is targeted to begin in 2008/2009 and will extend for over 25 years.

Doha and foreign partners have already pumped $ 15 bn of LNG ventures into the North Field, the world's largest non-associated gas field. It has proven reserves of over 900 tcf, or 25.485 tcm. That is more than 15 % of the total proven global gas reserves, and enough to last the tiny Gulf state about 250 years. Over 26 tcf of the reserves will be dedicated to the Exxon-QP project.
Qatar is set to be the world's biggest exporter of LNG by 2010 with an annual output of 30 mm tons and is pushing to take production to 45 mm tpy. Doha today exports about 15 mm tpy of LNG, mainly to Japan and South Korea.

Qatar has only about 150,000 citizens -- plus half a million expatriates -- who are set to become among the world's richest. It also has recoverable oil reserves of 15.2 bn barrels -- or 1.4 % of the world's total reserves, most of which is exported to Asia.