Shell plant in Bintulu shines as GTL pioneer
Published: Sunday, 8 July,2007 ,02 : 03AM Doha Time
gulf-times.com
The Shell Middle Distillate Synthesis plant in Bintulu, Serawak State, Malaysia
Royal Dutch Shell had recently taken a group of journalists to visit their first gas-to-liquids plant in Bintulu, Malaysia. Gulf Times’ Leonard H Manickam was one of the two journalists from Qatar who made the trip. He writes about the ‘founding capital of the GTL world’ and Pearl GTL, which is set to propel Qatar as the new GTL capital of the world.
As Qatar positions itself to become the GTL capital of the world in a few years’ time, the first-ever gas-to-liquids plant – the Shell MDS Malaysia – will be pushed a little further into history, but not to be forgotten.
Some of the visiting journalists with Shell officials inside the plant. Pictures by Leonard H Manickam and Shell
The Shell MDS (middle distillate synthesis) plant in Bintulu, which opened in1993 , took over 20 years of research and a proprietary synthesis catalyst to produce the cleanest of fuels and specialty chemicals using GTL technology. The project claimed its place in history as the world’s first full-scale GTL plant.
SMDS Malaysia is an operating company of the Royal Dutch Shell group with its headquarters in Kuala Lumpur. Bintulu, in Serawak State, is about two-and-a-half-hour flight away from the capital city.
Shell’s partners in the Bintulu venture are Petronas of Malaysia, Diamond Gas Holdings (a subsidiary of Mitsubishi Corp) and the Serawak State Government. Initial capitalisation was $850mn. Gas fields in the South China Sea offshore of Bintulu provide the input for SMDS Malaysia.
The GTL process has been around since the1920 s and was known as the Fischer-Tropsch technology. Shell has managed to near-perfect the technology thanks to their invention of a unique synthesis catalyst that is only available to the Anglo-Dutch company. Shell is thus by far the leader in the GTL business.
The SMDS plant in Bintulu produces14 , 700bpd equivalent of high quality liquid products including naphtha, kerosene, gasoil, detergent feedstock and waxes.
Virtually free of sulphur, nitrogen and aromatics, the SMDS products are colourless, odourless, highly bio-degradable and environmentally friendly.
The quantity may be small by today’s standards but the quality of the products is what makes the Bintulu project the best of its kind and also the most sought after.
Shell has also developed alternative automotive fuels that have been tested for their ultra-clean properties. Shell GTL fuel – a semi-synthetic diesel – was launched in 2002 in Thailand, making it the first Asian country to use the fuel that offered greater engine performance and significant emission reduction.
The next year, Shell launched a blend of standard diesel, Shell GTL fuel and special additives in Greece, which went on to become the official fuel of the 2004Athens Olympic Games.
SMDS technology converts natural gas to long chain paraffins, which are subsequently either hydrocracked to produce liquid fuels or fractionated to produce chemical feedstocks and waxes.
The use of non-associated natural gas as feedstock and the high selectivity of the conversion process ensure a consistency of quality unmatched by equivalent products derived from crude oil.
SMDS process incorporates state-of-the-art safety, energy conservation and environmental protection systems. The plant itself is so completely integrated that the only incoming raw material is natural gas and the only outgoing waste products are water and flue gas, which are regulated by highly efficient waste water treatment and flare system.
Even as the world reflects on global warming and the greenhouse effect, GTL process offers perhaps the best solution with lowest emission possible. In fact, emission is no factor at all – right from the production stage to the end-use. With wastage kept at the absolute minimum, the Bintulu plant has been the most economical to run and profit-making to the state as well as the company. The State of Serawak also gains from the jobs created; about95 % of the workforce is indigenous.
SMDS Malaysia products that are marketed globally include naphtha used as a cracker feedstock for the manufacture of ethylene. Kerosene from the plant, with its superior combustion properties and low emission is used in gasoil blending as well as ethylene cracker feed in combination with naphtha.
The low density gasoil, which is virtually free of sulphur and aromatics, is marketed as Shell GTL fuel across the world to blend and produce premium diesel.
Shell GTL fuels have undergone stringent tests in many leading countries including the fleet trial of25 Volkswagen cars in Berlin in May 2003 and trial runs with a Daimler Chrysler bus, operating on100 % Shell GTL fuel, in Central London (July-September2003 ).
In Qatar, it was the official fuel for the 15th Asian Games Doha,2006 . National carrier Qatar Airways has stated that it would be the first to fly its aircraft on GTL fuel.
Other products that SMDS Malaysia is famous for include detergent feedstocks that are mainly used in washing liquid formulations and as plasticisers for the polymer industry.
The waxy raffinate is used to produce base oil of high viscosity, which goes into the making of premium automotive engine oils.
Shell MDS also produces solvents for use in metal working and dry cleaning. Its drilling fluids are commonly used across the world by multinational exploration and production companies as well as others offering drilling fluids services.
One of the major outputs from SMDS Malaysia has been speciality waxes. They are highly in demand for use in a range of products such as hot melt adhesives, printing inks, cable fillings, match sticks, corrugated boards, fibre boards, and PVC lubricants.
The white waxes are ideal for applications requiring colour additives like crayons, candles and other decorative uses including graphic arts materials. Yet another variety is used for indirect food contact products like wrappings. These have been certified by the US Food and Drugs Administration (FDA). The waxes come in slabs, granules as well as in liquid form.
Shell officials say: “That is not all. There’s plenty more where all these come from. We are still finding out what else we can do with the GTL technology that is available to us.”
SMDS Malaysia has been “the showcase of Shell’s GTL technology to the world”, says Jon Chadwick, executive vice president, Asia, Shell Gas & Power.
In Qatar, Pearl GTL managing director and country chairman Andrew Brown had said recently” “Shell’s first GTL plant in Bintulu is making profits. The plant, though small compared to Pearl GTL, gives us information every day on how to operate a GTL plant. It gives us the confidence to make this huge investment here in Qatar.”
Chadwick, in Bintulu, is in synchronisation. “We have learnt a lot of lessons from SMDS Malaysia and we keep doing so. This is what is taking us to other, newer frontiers”.
With Pearl GTL on schedule for a 2010 opening, Ras Laffan (the site of the plant) will overtake all comers in the gas-to-liquids sector, but Bintulu will always be remembered as the founding capital of the GTL world.
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Pearl GTL to underscore Qatar’s green fuel might
Published: Sunday, 8 July,2007 ,02 : 03AM Doha Time
gulf-times.com
An overview of the water treatment units of Train 1 at the Pearl GTL project in Ras Laffan
Qatar’s prestigious Pearl GTL is just a few years away from becoming the largest gas-to-liquids plant in the world. But even as it takes the gigantic shape that will make it the biggest of its kind, others are scuppering plans to build rivals.
Royal Dutch Shell-financed Pearl GTL coming up at Ras Laffan will cost anything between $14bn and $18bn before its 2010 opening. Work is on at full steam, say both Shell Asia officials and their Qatar counterparts.
Costs have skyrocketed since the project was first initialed, but Shell is certain it is money well spent where others have retraced their intentions.
“We are in it for the money, and the money will come to us … that’s why even though our competitors are shelving plans to build GTL plants we are going ahead … whatever the cost,” says Jon Chadwick, executive vice president, Asia, Shell Gas & Power, during a recent trip to Bintulu in Malaysia where Shell built its first GTL plant.
With inflation now at the highest levels in the region, the prices of every resource that goes into the construction of what promises to be a modern day marvel have shot up multifold.
Be it steel, cement or labour, costs have gone through the roof, not to mention equipment and transportation.
But Pearl GTL is very much on schedule, say Shell officials. The project has been100 % financed by Shell, which, as it stands, is to the tune of $14bn … “all of it from our own capital reserves”, says Chadwick.
Costs could go up to $18bn by the time the project is ready for start-up, say Shell officials based in Doha.
The foundation stone for Pearl GTL was laid by HH the Heir Apparent Sheikh Tamim bin Hamad al-Thani in February this year.
Pearl GTL is a fully integrated gas-to-liquids project being developed by the State of Qatar and Royal Dutch Shell under a development and production sharing agreement that covers off and on shore project development and operations.
Pearl GTL will produce140 , 000bpd of GTL and some120 , 000bpd of condensate, liquefied petroleum gas and ethane in two trains.
Production from the first train is on track for a 2010 start-up, while the other train will come on line in2011 .
Contracts worth about $10bn have already been placed around the world for equipment relating to the project, Pearl GTL managing director and Shell country chairman Andrew Brown said in Doha recently.
“Around the world, thousands of engineers are at work ensuring that the project progresses at great speed to meet the 2010 start-up”, Brown said. During the construction phase, the plant will employ around35 ,000 staff. Work on the contractors’ camp to accommodate the personnel is at an advanced stage, he said
So what about the staff mix – expatriates and locals?
Chadwick says that after the start-up, the first aim would be to achieve50 % Qatarisation.
“Wherever we are present we tap the local potential, train them and hand over as much as possible to the natives of the land,” says another Shell official.
Equipment for the project has started arriving in Qatar and will continue into 2008 when construction will commence fully.
Pearl GTL will produce all that the Bintulu plant is putting out except waxes.
Why?
“Simply because a plant the size of the Qatar project will swamp the market with waxes making it unfeasible and unprofitable as the demand factor will practically vanish.”
The aim is to go in for even greater specialised products that are still being discovered. Why waste time and effort when already there is sufficient quality wax output from Bintulu to cater to the global market, asks Chadwick.
“Wax will be small-time for a plant the scale of Pearl GTL”, say Chadwick. The Qatar plant’s “potential is enormous, some of which we are still to find out, but they exist. And we are working on it.”
HE the Deputy Premier and Energy Minister Abdullah bin Hamad al-Attiyah has said Qatar’s green diesel output was largely meant for the international market.
“There are no plans for now to use it on a massive commercial scale within the country as it is expensive to produce. Also, GTL cannot be used as fuel by itself. It has to be blended,” al-Attiyah said.
Qatar has always targeted the international market, the deputy premier said, adding: “It is true that we are using GTL fuel on some vehicles in Qatar as part of popularising the fuel. It has definite advantages over other kinds of fuel because of its pro-environment features.”
GTL-powered vehicles have already proved their quality – in performance, environment-friendliness, efficiency, superiority and, of course, power.
Just last month, an Audi racer powered by Shell GTL diesel won the24 -hour Le Mans race for the second time in a row. In2006 , Audi’s was the first diesel-fuelled (Shell GTL Fuel) car to win the international event as well as the American Le Mans series.
Green fuels and hybrid-engines are being discussed practically on a daily basis with major global auto makers all having either introduced the cleaner versions or are in the process of doing so.
Next in line is GTL aviation fuel. Qatar Airways has already stated its intention to be the first to fly its aircraft on GTL fuel.
The issue of carbon emissions in the sky has also been discussed and thrashed out at aviation events, most recently at the Paris air show.
Demand for GTL is growing at a tremendous pace, what with the world waking up to the degradation of the environment. GTL fuel has been endorsed as one of the greenest forms of energy available and the energy answer of the future.
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WHAT THEY SAID
Published: Sunday, 8 July,2007 ,02 : 03AM Doha Time
gulf-times.com
When does Shell see returns from the Pearl GTL project?
“Almost from the start,” says Jon Chadwick, executive vice president, Shell Gas & Power, Asia.
However, Dick Benschop, vice president and managing director of Shell Malaysia Gas and Power, says: “Shell has a policy of recovering its investment before sharing the returns with our partners.”
So when will Qatar start reaping the benefits from Pearl GTL?
“We cannot say” is the answer.
Cannot or will not?
Chadwick answers: “There is a production sharing agreement that the State of Qatar and the company have entered into which cannot be disclosed.
“In the case of Pearl GTL though, the State of Qatar will start getting a share from the outset.”
“How much?”
“That’s asking for too much, I guess,” says Chadwick.
Andy Norman, the communications manager, is equally non-committal. “You can ask me all you want and you will still get the same reply. No reply.” |
