The Shell GTL Process:

Towards a World Scale Project in Qatar: the Pearl Project

Arend Hoek

Shell Global Solutions International, Amsterdam

DGMK-Conference “Synthesis Gas Chemistry”October 4-6, 2006, Dresden

2

Contents

Introduction

F-T catalysis

Hydroprocessing

Bintulu learning

Evolution

The Pearl project (Qatar)

Conclusions

3

What is Gas To Liquids (GTL)?

LPG GTL Naphtha

GTL Gas Oil

n-ParaffinsGTL Base Oils

RawNatural

GasFischer Tropsch

SynthesisProductsWork-up

CO + 2H2 -CH2-

CH SyngasManufacturing

4 SyngasManufacturing

O 2

GasProcessing

Syngas

Methane Oxygen+ Hydrogen Carbon monoxid

e

WaterFischer-Tropsch distillates+ +

Catalyst

Condensate

LPGEthane

Sulphur

Conversion of natural gas to clean, high quality fuels & products via the Fischer Tropsch process

Bintulu SMDS

4

SGP Upscaling: Experience + Modelling

Upscaling based on design criteria used for 50 years

Upscaling evaluated by fluid flow and reaction modelling

• High quality Syngas:H2/CO 1.8 mol/molCH4 slip < 0.5 vol % dryCO2 content ~ 2 vol % dryCarbon to CO ~94 vol %

• Modelling tested against Bintulu

• Sufficient reactant mixing time

• Minimum temperature fluctuations near the refractory wall and no hot spots

• Dimensioning to achieve long refractory lifetime

• Burner front design checked by finite element stress analysis

5

Technical challenges

Carbon efficiency- selectivity of catalysts

Capex- process intensity

Availability- catalyst stability- robustness

Materials- resistance against corrosion, erosion, metal dusting

A GTL plant is mainly a UTILITY complex- efficient use of steam

6

Advantages

All in house technology

No boundary issues between process step

In house catalyst manufacturing

No secrecy issues

7

Contents

Introduction

F-T catalysis

Hydroprocessing

Bintulu learning

Evolution

The Pearl project (Qatar)

Conclusions

8

Fischer-Tropsch synthesis

Promoted Co catalyst

Fixed bed multi-tubular reactors

9

CO

CH3

C2H5

CnH2n+1

CH4

C2H6

CnH2n+2

= probability of chain growth

1 - = probability of chain termination

n-1

Cn =n

1 − α

1 − α

(1 − α)α

(1 − α)

α

α

α

(1 − α)α

α

1−α

αα

(1 − α)

1 − α

Probability

Schulz Schulz -- FloryFlory FT KineticsFT Kinetics

10

0.75 0.80 0.85 0.90 0.950

20

40

60

80

100%m

Probability of chain growth

New catalystsFe (classic)

Co (classic)

C 20+

Wax

C12-19

Gasoil

C

3-4 LPG

1-2 Fuel gas

C5-12 Tops/Naphtha

C

The Relevance of Catalyst Selectivity

Wax

Producewax

Crack back

11

Preferred process lay-out

Producing max. heavy wax (max. chain growth probability leads to:

High efficiency (liquid yield)

High gas oil and base oil yield

High degree of isomerisation of gas oil and base oil

12

Fischer-Tropsch catalyst R&D

80

85

90

95

100

0 50 100 150 250 300 350

relative reactor productivity

Liqu

id s

elec

tivity

, %w

200

Design pointPearl GTL

200

Bintuludesign

capex down

FutureGTL?

2nd gen.Pearl GTL

BintuluDBN

efficiency up

1st gen.

R&D cat.

2nd gen. Bintulu

13

Shell FT: Heavy Paraffins Synthesis (HPS) Configuration: Multi-tubular, water/steam cooled

Performance: Automated, fast catalyst loading, In situ catalyst regeneration

High productivity: 7,000 - 9,000 bbl/d per reactor

Liquid Selectivity (CO to liq.): >90%

Easy operation, including start-up, shut-down and transients

Heavy product

Synthesis gas

Light Product

CoolingSteam

Water

14

Contents

Introduction

F-T catalysis

Hydroprocessing

Bintulu learning

Evolution

The Pearl project (Qatar)

Conclusions

15

Hydroprocessing step

Dedicated catalyst and conditions

Hydrogenation of oxygenates and olefins

Hydrocracking/isomerisation of paraffins

Bifunctional catalyst: noble metal and acid function

Low gas make, product flexibility

7.5 years in service

16

0

10

20

30

40

50

60

70

80

90

100

0 100 200 300 400 500 600 700 800

atm.bp, °C

reco

very

, %w

total feed

total product

TBP-GLC of hydroprocessing feed and prod.

17

Screening of hydroconversion catalysts

0

10

20

30

40

50

60

70

C1-C4 sel C5-150 sel 150-200 sel 200-370 sel

sele

ctiv

ity, %

w

catalyst 1catalyst 2catalyst 3catalyst 4catalyst 5

18

Contents

Introduction

F-T catalysis

Hydroprocessing

Bintulu learning

Evolution

The Pearl project (Qatar)

Conclusions

19

SARAWAK

BintuluShell MDS Plant

SABAH

PENINSULARMALAYSIA

Kuala Lumpur

Head Office

INVESTMENTInitial capital investmentof US$850 million2003 debotteneckinginvestment of US$50 million

STRUCTUREShell MDS (Malaysia) Sdn. Bhd.Shareholders: Shell, Mitsubishi, Petronas, Sarawak State

SCOPEConversion of 110 mmscf/d NG into 575 kt/a (14,700 b/d) of GTL productsProduces clean fuels and specialityproductsWorldwide marketing

Shell MDS in Malaysia

20

SMDS SMDS -- BintuluBintulu -- schemescheme

O2O2

NaturalGas

100 MMSCF/d

CO + 2H2

SynthesisSynthesis

H2O

– CH2 –

HydrogenationHydrogenation

14,700 bbl/d

Middle DistillatesHydrocrackingHydrocracking

ASUASU

SGPSGP HPSHPS

HPCHPC

CH4

Lube oil feedstock

Syngasmanufacture

Syngasmanufacture

Solvents

Waxes

21

Shell MDS Plant in Bintulu

Bintulu SMDS:One train of 14,700 b/d

Malaysia LNG: 6 trains, total of 16.5 mln tpa

22

Boilers

HMU

SGP

HPS

HPC/HGU/Distillation

Wax plant/Specialties

ASU

Compressors

Air coolers

Waste water plant

SMDS SMDS -- BintuluBintulu

23

• SMDS research started 1973

• Pilot plant 1983

• SMDS-M project approved 1989

• SMDS-M start-up 1993

• ASU explosion: ingress of combustibles 1997ex forest fires

• Restart 2000

• Debottlenecking 2003

• 1 year of operation without complex trip 2004

SMDS Bintulu story

24

90919293949596979899

100

1994 1995 1996 1997 2001 2002Air Separation UnitShell Gasification Process

FT Synthesis

Bintulu: Invaluable learning for Plant reliability

Huge challenges at start-up

“You don’t know what you don’t know”

Has proven catalyst & reactor systems, procedures for start-up, shut-down, regeneration, emergencies and operability of complex integrated system

Plant Reliability (% on-stream)

2003 2004

25

75

100

2001 2002 Pre-DBN(2003)

Post-DBN **

(2003)

100

energy consumed/tonneproduced

9693

88

steady state (no statutory shutdown)

Overall 18% improvement in NG efficiency

Achieved by improved utilities integration

2004

85

Continuous Improvement in S-MDS Bintulu Natural Gas Efficiency

Proj. 2005

~84

80

85

90

95

(relative scale)

** DBN = Debottlenecking

26

LPG(0 – 5%)

GTL Products, yields and applicationsCracker complex

Shell Pura: Thailand

Shell V-Power: Germany

Shell Helix Ultra: Global

GTL Naphtha

(30 – 40%)GTL Gasoil(40 – 70%)

GTL Base Oils

(0 – 30%)

GTL plant (Shell Bintulu)

Maximum value from GTL products is derived from an understanding of the fully integrated value chain

Patent portfolio covering GTL products in high-value applications

Marketing GTL products for 10 years

Plastic products

27

Launch of Shell-VW GTL Test : Berlin, 6th May 2003

Synthetic diesel based on SMDS Gasoil - Bintulu

28

GTL Fuel can improve air quality in Mega Cities

Dieselisation will improve the CO2 emissions of the transport sector.

Reducing other diesel related emissions will be a key enabler.

Options available

Reduced sulphur content in diesel

Improved engine management systems

Exhaust after treatment (particle filter or chemical treatment)

Introduction of GTL fuel

Growing importance of clean public transport

Nitrogen Oxides - 6%Particulates (PM10) - 20%Hydrocarbon - 63%CarbonMonoxides - 91%

*Reference Fuel: Diesel < 10ppm sulphurSource: VW

Emission benefits* of Shell GTL fuel

Based on trial result of 100% Shell GTL Fuel in 25 Volkswagen Golfs without any vehicle modifications, Berlin, 2003.

29

Shell worked with Audi to build the first diesel racing car winning the Le Mans 24 hour race. The Audi R-10 is fueled by a diesel containing GTL Fuel, based on Shell V-Power technology.

Fuel and engine developments together deliver:Exceptional TorqueVery low noiseImproved fuel consumption

And…………GTL Fuel is by no means slow

Audi R-10 during its maiden victory at the 12 hours of Sebring

30

with the Courtesy of Volkswagen

31

Contents

Introduction

F-T catalysis

Hydroprocessing

Bintulu learning

Evolution

The Pearl project (Qatar)

Conclusions

32 1990 2000

Spec

ific

Cap

ex, a

.u.

Economiesof Scale

Bintulu

2nd generationcatalyst

GTL Plant Costs

Gas to Liquids coming of age

3rd generation catalyst

2010 2020

Brown FieldExpansion

Two trainsStart-up Year

012345678

1960 1970 1980 1990 2000 2010

Trai

n ca

paci

tyM

tpaExisting

ConstructionProposed

Spec

ific

cost

, a.u

.

compare: LNG

(12,500 bpd)

(140,000 bpd)

33

Contents

Introduction

F-T catalysis

Hydroprocessing

Bintulu learning

Evolution

The Pearl project (Qatar)

Conclusions

34

Qatar Shell GTL Project Overview

NORTH FIELD

Doha

Ras Laffan

EthanePropaneButaneCondens.Sulphur

C2/LPG Extr.Cond.Process.

Gas Treating

Sulphur Recov.NaphthaGasoiln-ParaffinsBaseOilsWater

GTLUtilitiesStorage

General Fac.

Two wellhead platforms

Two onshore phases

Two multiphasepipelines

Fully integrated project

Development Production Sharing Agreement (DPSA), 100% Shell

~1,600 MMscf/d well head gas

140,000 b/d GTL products

Two phases, start-up phase 1: 2009/2010

35

Tangible Progress in Qatar

Seismic800 km2 3 D seismics completed in 2003

Providing info for appraisal drilling and for subsurface modelling of allocated area

Appraisal Well DrillingFirst well spud on 14th February and completed31st August 2004

Second well spud on 4th September and completed 19th December 2004

Geotechnical Site InvestigationsFirst phase completed Dec.’03 – April ’04

36

Pearl GTL Project – Progress Continues…

2005: Front End Engineering Design (FEED) completedPermit to Construct grantedProject Management Contractor (PMC) appointedAll EPC contracts tenderedFT synthesis reactors orderedDevelopment drilling contract awarded

2006: Submission of Final Development PlanF-T catalyst production startedFinal project approvalsAward EPC contractsStart site activitiesIntense procurement activities

2002: Statement of Intent

2004: Development Production Sharing Agreement (DPSA)

2003: Heads of Agreement (HOA)

37

Tangible Progress: FEED and Contracting Activities

EPC Contracting:– Multiple contractor strategy– Several bids awarded (Sep. 2006)

Onshore FEED:

– Conducted by JGC, primarily in the London offices of MW Kellogg (joint venture of JGC & KBR), during March 2004 – May 2005

– Close to 500,000 man-hours

Offshore Front-End-Engineering-Design (FEED):

– Conducted in Shell offices, Aberdeen during March 2004 to February 2005

Investment Decision– July 2006

38

GeneralFacilities

SMDS capacity build-up configuration

Work-upincl HPC

ASUs SGPs HPS reactors

Modular sectionsC

onfig

urat

ion

for 7

0,00

0 bp

d

Single train Storage &Loading

CommonUtilities

Additional modules to build to capacity of 140,000 bbl/d

Work-upincl HPC

Single train

39

Watertreating

Utilities

Gas Processing GTL Process

ASUs

Storage

Pearl project (Qatar Shell GTL)

40

Type Quantity

Equipment 2,300 items

Equipment 100,000 tons

Piping 50,000 tons

Structural steel 30,000 tons

Concrete 200,000 m3

Cables 1,800 km

Insulation 700,000 m2

Control loops 3,500

1440 meters1610 meters

Onshore construction dimensions

41

Pearl will break many recordsThe world's largest capacity to produce premium quality base oils.

The worlds largest producer of GTL based normal paraffin and will be the worlds lowest cost normal paraffins producer.

The largest single train Hydrocracker in Shell and the worlds largest Hydrocracking capacity in one location.

The worlds largest ASU in terms of high purity Oxygen and the worlds largest overall Oxygen production on one location.

The worlds largest ever catalyst supply contract.

The worlds largest system for full recovery of industrial process water, achieving 'zero-liquid discharge‘.

One of the worlds largest and most advanced Fieldbus instrumentation and control systems.

One of the worlds most advanced multipurpose, multi plant dynamic process simulators.

The largest steam generation capacity of any hydrocarbon processing plant in the world (or indeed ... in the Petroleum Industry).

42

Project Implementation:

• Process technology• Utilities technology• Offsites technology• C, M, E, I

engineering• Process control• Rotating equipment• QA/QC• HSE management• Materials&Corrosion• Project engineering• Logistics• Value engineering• Contracting&Procur.• Commissioning& SU• Operations

GTL R&D:• Surface sciences• Adv. analytical tools• FT catalyst

development• Reactor engineering• CFD modelling• Syngas

development• Hydro conversion• Bench scale testing• Pilot plant testing• IP protection• Process modelling

GTL Challenges: ‘From Reservoir to Market’

Upstream:• Seismics• Geology• Petrophysics• Reservoir

engineering• Production

technology• Well engineering• Well testing• Offshore structures• Pipelines• Materials&Corrosion• Operations

Commercial etc:• Economics• Financing• Legal• Taxation• Authority

engineer.• Marketing• Trading• Shipping• Accounting• HR management• IT management• Traning&Devel.• Risk

management• Project

integration

.. excellence over huge span of skills

NaphthaLPG

Gasoil

LDFBaseoils

43

Contents

Introduction

F-T catalysis

Hydroprocessing

Bintulu learning

Evolution

The Pearl project (Qatar)

Conclusions

44

Why Gas to Liquids?

GTL Fuel has unique properties:

-Virtually free of sulphur and aromatics

-High cetane number

Energy security → Strategic diversification of energy supply

→ Biomass and Coal to Liquids

Environment → Trend towards cleaner fuels

Economic development → Remote gas reserves commercialisation

→ Most cost effective alternative fuel

→ Strategic diversification of gas market

45

Shell GTL Development

Laboratory1973

Pilot plant1983

Bintulu Malaysia14 700 b/d1993

World-scale plant: Shell Qatar GTL140 000 b/d2009

→ Integrated world scale Qatar project based on proven technology→ A platform for exciting new industry based on unique new products

Long lead times & entry hurdles characterise GTL development

46

The end

Thank you for your attention

47

Back-up slides

48

Unconstrained MarketSMDS75,000 bbl/day

Product carriers-spot/term

Distribution/Blending

600 MMSCF/D

LNG Plant~ 4 mtpa

RegasificationShipping ~ 3500 nm3 x 130,000 m3

600 MMSCF/D

Fixed Chain

GTL as Alternative to LNGGTL as Alternative to LNG

49

15 tcf gas over project life

LNG150 mln tpa

8%

Growth of GTL is not market constrained and complementary to pipelines and LNG

GTL product slate2,000 mln tpa

0.6%

Virtually

unrestricted

GTL Appeals to Gas Resource Holders

50

-30

-25

-20

-15

-10

-5

0

78 79 80 81 82 83 84 85 86 87Cetane number

CP

or C

FPP,

°C

Cloud

CFPP

changing process conditions

Cold flow properties of Shell GTL fuel (340°C endpoint)

51

0

0.2

0.4

0.6

0.8

1

1.2

0 20 40 60 80 100Shell GTL fuel content %

CO

g/k

m

CitroenXantia

M.BenzVWBora

POTENTIAL TO MEET REGULATIONS

0

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0 20 40 60 80 100Shell GTL fuel content %

PM g

/km

CitroenXantia

M.BenzVW BoraCitroenXantia

M.BenzVWBora

Euro III limit

Euro III limit

Euro IV limitEuro IV limit

52

Gas grows faster than oilGas grows faster than oil

mln boed

Gas

Gas for PowerGeneration

Oil

Gas growth driven by:

CCGT* economics and power liberalisationCustomer preference for clean fuelKyoto and CO2 constraints

0

20

40

60

80

100

120

1990 2000 20202010

Oil

& G

as d

eman

d

*CCGT = Combined cycle gas turbine

53

2000 million scf/d

20

1000

500

50

200

100

101000 2000 3000 4000 5000 km

Pipeline LNG

Quantity

Distance

Electricity

Chemicals

GtL

Gas Utilisation

54

Continuous operation of Bintulu complex without unplanned shutdown

0

50

100

150

200

250

300

350

400

450

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Day

s be

twee

n co

mpl

ex s

hutd

own

15

5679

141

85 71

114

157

270

430

55

Targetting different markets

• LNG: Dedicated shipping and receiving terminalsLong term contractsPower generation and gas markets

• GtL: Viable for smaller gas reservesPotential to substitute for oil importsHigh quality, ultra clean fuel applications

LNG & GTL in comparisonLNG & GTL in comparison

56

Industry LCA studies show the GHG emissions of a GTL system to be comparable to a complex refinery system

Efforts are focused on GTL process efficiency through R&D programs, targeting up to 20% efficiency improvements

Advanced GTL engines are being developed, sponsored by governments, and targeting up to 10% efficiency improvements

The GTL system also has:– significant lower impact on air

acidification and smog formation– lower emissions of particulate matter– less hazardous waste production

Greenhouse Gases(CO2 equivalents)

System -Potential

(ProcessEfficiency)

0GTLREFINERY

100%

GTLGTL

Potential

(EngineEfficiency)

System -

Use of productsTransport to usersProduction of productsExtraction of feedstock

Life Cycle Analysis – GHG Emissions

57

NOx Partikel·10 HC CO

0,1

0

0,2

0,3

Em

issi

onsw

erte

[g/

km]

Grenzwerte EU IV Diesel < 10ppm SShell GTLΔNOx= - 6,4% ΔPart. = - 26%

ΔHC = - 63% ΔCO = - 91%

EU IV

Emissions Performance – Volkswagen Test

Berlin Fleet test 2003 - VW Golf with Shell GTL Fuel

58

Simplified GTL Process Overview

Natural Gas Shell

Gasification Process (SGP)

Heavy Paraffins Synthesis (HPS)

Heavy Paraffins

Conversion (HPC)

LPGNapthaGasoil

Lube Base Oils Units

(BO)

Lube Base Oils

Utilities

Off-sites & Common Facilities

Light Detergent

Feedstock unit (LDF)

NormalParaffins

Air Air Separation Unit (ASU)

Natural Gas Steam

Methane Reformer

(SMR)

Hydrogen Manuf. Unit (HMU) H2

Synthetic Crude Distiller

(SCD)

O2

Key Processes: Shell Proprietary Technology….. proven in Bintulu