Shell announced last week that its joint venture Pearl gas-to-liquids plant in Qatar is operating at a reduced rate of production due to unforeseen maintenance required on some or all of the plants 18 gasifier units. A representative said that although the company has GTL base oils in stock, the problem is expected to reduce the amount of product available for sale in 2017.
Repairs are already underway, and operations at Pearl will continue at a reduced rate until repairs are completed, the company stated in a news release. Shell is currently carrying out technical assessements to determine when the plant will return to full production. In the meantime, Pearl is producing at approximately 50 percent of plan.
A joint venture with Qatar Petroleum in Ras Laffan Industrial City, Pearl has a volume of GTL products in storage, and the company said it will work closely with customers to minimize impacts to supplies.
A Shell representative told Lube Report that while the Pearl plants position at this stage is under evaluation, there will be a reduced amount of feedstock for production of petroleum products, and as such, less of the 3 centiStoke, 4 cSt and 8 cSt base oil available to Shell. There will be a reduced amount of product available for sale in 2017, the representative said.
We are activating business continuity plans in order to ensure that there is no impact on finished lubricants customers, another Shell representative told Lube Report. This official also confirmed that Shell is primarily focusing on consuming GTL base oils within its own finished lubricants business. There are no plans to offer Shell GTL base oils in the merchant market. Shell has developed term deals with a couple of players. Due to commercial and contractual sensitivities, we are unable to share further detail about these select term deals.
If GTL base oil production was reduced for a long period of time in 2017, it could impact the base oil market if Shell needs to begin purchasing more base oil from third-party suppliers.
The Pearl facility can produce 140,000 barrels per day of GTL products. Pearls total base oil capacity is 28,000 b/d. The plant produces 4 cSt and 8 cSt API Group III base oil and a 3 cSt Group II.
The overall Pearl refinery cost about $19 billion and opened in 2011. According to Shells web site, full ramp-up of the Pearl GTL project was achieved towards the end of 2012. In addition to GTL products, the plant also produces 120,000 barrels per day of natural gas liquids and ethane.