Exxon says still pursuing GTL project in Qatar
Published: Thursday, 14 September, 2006, 08:50 AM Doha Time
gulf-times.com
VIENNA: ExxonMobil Corporation, the world’s largest publicly traded oil company, is still pursuing a multi-billion dollar gas-to-liquids project in Qatar and is looking at ways to cut costs, its chief executive said.
Exxon’s plans call for a plant that would convert natural gas into 154,000 barrels a day of low-sulphur, liquid fuels. Two months ago, Royal Dutch Shell announced a similar project in Qatar that may cost as much as three times its original estimates and take several years to build.
“It’s really a cost issue now in this environment,” Exxon’s Rex Tillerson said in an interview in Vienna yesterday. “The idea is to bring the cost down into something that’s acceptable to us and that’s more acceptable to the Qataris. The reserve dedication has already been made on that project.”
Exxon and other major oil companies are spending more because surging oil prices are increasing competition for equipment, labour and materials.
Qatar, which is using gas-to-liquids technology, or GTL, to diversify its gas exports, has said it is studying how best to use its gas reserves, the world’s third-largest.
Irving, Texas-based Exxon isn’t falling behind Shell in GTL, Tillerson said. “In terms of the technology, we are far from being left behind,” he said. “If anything, we think our technology is further advanced than others, particularly in terms of the finished products that come out.”
Exxon’s GTL process will produce a “much higher percentage of lubricants, which have a higher value,” he said.
Shell already sells GTL fuels from an existing plant in Bintulu, Malaysia. The fuel is more expensive than normal diesel and its low-sulphur properties make it a useful blending component for new brands of cleaner-burning motor fuels.
Exxon has told the Qatari government it’s re-examining ways of configuring the planned GTL plant to cut costs, Tillerson said.
“We continue to work and see where we are over the course of this coming year,” he said. Tillerson was in Vienna today to attend an energy conference hosted by the Organization of Petroleum Exporting Countries.
GTL is one of several types of “non-conventional oil,” new methods of producing oil, or similar oil-like fuels, from sources such as rocks, coal, gas and plants.
Most forecasts show resources will still contribute relatively little over the next 20 years or so to the world’s total oil supply, which is currently about 85mn barrels of oil a day.
Tillerson predicted gas-to-liquids supply and coal-to-liquids supply are both expected to rise to 2.1mn barrels a day each in 2030 from about 200,000 barrels a day combined last year, Guy Caruso, head of the US Energy Department’s Energy Information Administration said in Vienna yesterday.
Meanwhile, a spokesman for South Africa fuels company Sasol Ltd said yesterday that technical problems have delayed commissioning of the Oryx gas-to-liquids plant in Qatar and the plant’s output would not reach the market until the first quarter of next year.
Previously, the plant had been scheduled to start selling fuel this year but problems with a super-heater have caused delays.
Oryx is the world’s first commercial-scale gas-to-liquids (GTL) plant. The plant will produce 34,000 barrels per day of liquid fuels from natural gas.
The plant is operated in partnership with Qatar Petroleum, while oil major Chevron will do most of the marketing in Europe and North America under the joint Sasol Chevron brand.
Royal Dutch Shell is developing what will be the world’s biggest GTL project in Qatar, which is expected to start around the end of the decade. – Bloomberg, Reuters |
