LONDON: Major construction work at the Qatargas 4 liquefied natural gas (LNG) facility and Pearl, the world’s largest gas to liquids (GTL) plant, will be completed by year end, with production ramping up in 2011, Royal Dutch Shell said on Thursday.
Shell holds 30 percent of the 7.8 million ton per year LNG project, known as train 7, with state-run Qatar Petroleum holding a 70 percent stake.
"Major construction at Pearl and Qatargas 4 will be completed by the end of this year with ramp up for both in 2011," Shell Chief Executive Peter Voser told journalists.
Qatargas, which is majority owned by QP, said in mid June it was on track to start up train 7 by the last quarter of 2010, along with Qatargas 3 train 6 — a 7.8 mpta facility in which Conoco holds a 30 percent stake.
Qatargas was not available for comment on Thursday.
When completed, trains 6 and 7 — which are intended to supply Europe, Asia and the United States — will cement Qatar’s position as the world’s biggest LNG exporter with an annual production capacity to 77 mpta.
LNG production facilities, known as trains, take several weeks to ramp up production because miles of pipes have to be cooled down before the gas can be chilled to liquid and such facilities have in the past begun producing gas before all construction was completed.
Shell said in late 2009 it had delayed the start up of the $8 billion Qatargas 4 to late 2010, because contractors were struggling to keep up with the pace of developments in Qatar’s booming gas industry.
The delay helped reduce oversupply in the global LNG market in early 2010, with widespread summer maintenance at existing Qatari production facilities helping drive up LNG spot prices and the UK gas market.
Prices have fallen in the weeks since the maintenance outages ended, and the start up of two new big plants in early 2011 could drive down prices further.
Pearl, which is also a joint development by Qatar Petroleum and Shell, will process about three billion barrels-of-oil-equivalent over its lifetime from the huge North Field stretching from the Qatari coast into the Gulf.
Pearl GTL will produce diesel and kerosene, lubricant oils, naphtha and paraffin.
