After a long period of research and construction of plants for this purpose, the commercial stage of Gas to Liquid (GTL) – e.g. diesel, kerosene and gas oil- production and marketing has begun, instead of its exclusive extraction from crude oil. The Royal Dutch Shell Company has indeed exported the first shipment from the Pearl GTL project in Ras Laffan Industrial City in the state of Qatar, and the shipment includes gas oil fuels. The significance of the project lies in the fact that it is producing diesel, gas oil, kerosene, naphtha and paraffin directly from natural gas, instead of extracting these products from the refining of crude oil. This means that natural gas has a new scope that had hitherto been exclusive to crude oil. Pearl GTL is a joint venture between the state-owned Qatar Petroleum (QP) and Shell. The project has a production capacity estimated at 140 kb/day of petroleum products (including 50 kb/day of gas oil), in addition to a production capacity of 120 kb/day of condensates and natural gas liquids, and 11 million tons annually of liquefied petroleum gas (LPG). Pearl GTL requires around 1.6 billion cubic feet of natural gas per day to produce these ‘green' liquids. Qatar will provide these large quantities of natural gas from the offshore North Field. This is while the cost of this mega project (the largest of its kind in the world) was about 19 billion dollars. One of the advantages of GTL conversion is the fact that ‘green' petroleum products are obtained, as they contain very low levels of sulfur dioxide or nitrogen oxide pollutants. Given the high costs and the limited quantities of these products, it is expected that they will be initially used by mixing them with other similar traditional products, to improve the quality of these products, and render them compatible with the strict environmental laws in the industrialized countries. In other words, the marketing plan for these products involves their wholesale for the purpose of mixing them with analogous traditional products (i.e. mixing limited quantities of the new gasoline with the old type, or mixing limited quantities of the new diesel with the old type). This would help reduce environmental contaminants in old products. Hence, these ‘green' products are not expected to be marketed at petrol stations for the consumers to purchase them directly, and one of the reasons for this is the fact that they are available in limited quantities, in addition to being very costly. As such, the advantage for countries with large natural gas reserves lies in the availability of new possibilities for the use and marketing of natural gas. At present, natural gas is used to fuel power stations or as feedstock for petrochemical plants, in particular aluminum smelters. Further, these countries will obtain higher revenues by extracting ‘green' liquids from natural gas and selling them, instead of limiting themselves to selling natural gas at lower prices as fuel for power plants or as feedstock for other types of plants. And as for consuming countries, petroleum liquids produced from natural gas provide cleaner fuels with less environmental impact. The most important challenges facing this industry, meanwhile, lie in the fact that they require large quantities of natural gas to produce limited quantities of petroleum liquids. This entails a rapid depletion of gas reserves in the event this type of production is rapidly expanded. In addition, there is the problem of the high cost of building GTL production plants, and subsequently the high price of these products. This begs a question pertaining to the impact these petroleum liquids may have on the oil industry. In fact, these ‘green' liquids will prolong the life of petroleum, and render it more competitive than other alternative energy sources, as they will help provide petroleum products that are more environmentally friendly in the long run. * Mr. Khadduri is a consultant for MEES Oil & Gas (MeesEnergy)
