Shell: GTL Taps Will Gush in 5 Years


LONDON-Shell International Petroleum Co. Ltd. projects that the Shell gas-to-liquids plant in Qatar will be onstream in 2009, including base oil output of a half-million tons per year in the first year. The projected GTL base oil production will include both API Group III and Group II stocks.

Shell has offered some high quality base oils from GTL feedstocks since 1993, William King, Shell International Petroleums GTL base oil manager, told last weeks ICIS-LOR World Base Oils Conference here. But the relentless focus on cost reduction over the past decade means now GTL is commercially viable on a large scale.

Last October Shell announced plans for the worlds largest gas-to-liquids plant at Ras Laffan, Qatar. The U.S. $5 billion project consists of two 70,000 barrel-per-day phases. The first phase, including base oils, will be onstream in 2009, King said, with an initial output of 500,000 tons per year of GTL base oils.

The first generation of Shell GTL base oils have been manufactured in France and Japan, from waxy raffinate feedstocks shipped from Shells GTL plant in Bintulu, Malaysia. At the Bintulu facility, natural gas and oxygen are subjected to heavy paraffin synthesis (Shells update of the Fisher-Tropsch gas-to-liquids technology), then hydrocracked, partially isomerized and distilled prior to shipment to France or Japan. Shell first began shipping the waxy raffinate from Bintulu in 1993.

Shells technology advances make GTL very attractive, said King. New technology, economies of scale and low-cost gas feedstocks will bring the Qatar second-generation GTL plant’s costs down to around 40 percent of the Bintulu plants costs, on a barrel-per-day basis. Second-generation GTL plants will have base oil units on site, he noted.

The API Group III base oils produced by the GTL plant will give most value for top-tier automotive applications, King said. But as supply grows, they will also become economically viable for mainstream use.

Not all of the GTL output will be Group III, however. King expects some production of 2 cSt. Group II base oil for industrial applications.

Premium base oils (Group III and IV) currently account for a small segment of global demand – about 1.2 million tons vs. total global demand of 30 million tons per year. But premium base oil demand may double by 2015, King said, driven by the need for low-sulfur base oils to help reduce automotive emissions. Another important application will be low-temperature formulations for automatic transmission fluids.

GTL base oils are a reality now, King said, and the next generation from world-scale plants will be higher quality and available in much larger volumes.

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