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Gold/Mining/Energy : Gasification Technologies -- Ignore unavailable to you. Want to Upgrade?

To: Dennis Roth who wrote (1131)	3/16/2008 8:43:34 AM
From: Dennis Roth	Respond to of 1740

Shell's Pearl GTL Project in Qatar eyes good profitability despite huge construction costs ameinfo.com Excerpt: Shell's Pearl GTL plant in Qatar is likely to have a pay-back time of as little as four years, given the current high oil prices and despite the fact that the project, which originally was budgeted at around $5bn, will come in somewhere between $12-18bn, or more. In a report by Upstream, the integrated Pearl GTL project is said by observers to be able to bring in $4.5bn per year at oil prices of around $50 per barrel. The 140,000 b/d facility will come onstream at the end of the decade, converting 1.6 billion cf/d of gas produced by Shell at Qatar's offshore North Field into high-quality fuels, as well as treating an additional 120,000 boe/d of condensates, ethane and LPG. The project is thought to have a development cost of between $4-6 per boe, according to Upstream, and international consultants Wood Mackenzie have put the project's net present value at $27bn, based on a $65 oil price per barrel and assuming a capital expenditure of $15bn. Significance: Spiralling construction costs have led to the scrapping of several GTL projects around the world and in Qatar, where ExxonMobil withdrew from a proposed large-scale GTL venture some years ago, doubting its plant's profitability. The news from Shell, Wood Mackenzie and industry insiders in Upstream, however, indicate that news of the GTL technology's low-profitability in a high-construction-cost environment has been severely exaggerated, especially considering the growing demand for the cleaner fuels produced by GTL plants in the United States, Europe and parts of Australasia remains undented. While there might therefore be some reason to revisit suggested GTL projects, the Middle East and North Africa (MENA) offers some reasons for caution. The generally high domestic fuel subsidies and reliance on refined products imports in many MENA states makes GTL ventures highly uneconomical as soon as parts of the production have to be sold domestically.