Royal Dutch Shell plc (RDS.A) and Qatar Petroleum announced that their joint development, Pearl gas-to-liquids (GTL) plant received the first flow of offshore sour gas through a subsea pipeline. The facility is expected to be operational in the next couple of months.
Launched in July 2006, in the Ras Laffan Industrial City, the project spreads over an area of 60 kilometers, covering two offshore platforms off the Qatar coast. This is connected to the giant onshore GTL plant, via pipelines, labeling Pearl the biggest energy venture in the State of Qatar.
Pearl will have production capacity of approximately 1.6 billion cubic feet of gas per day from the North Field, when fully operational. Further process will generate about 120,000 barrels per day of condensate and natural gas liquids and 140,000 barrels per day of GTL products, including gasoil, high specification lubricants base oils and chemicals feedstock.
Shell, the operator of the project, expects Pearl to be the prime growth driver in 2012, with a contribution of about 8% to the company’s worldwide production. The company has been the pioneer in building the world’s foremost commercial-scale GTL plant in Bintulu, Malaysia, in the early nineties.
Based in Hague, Netherlands, Shell is one of the largest integrated oil and gas businesses in the world. The group has operations all over the world and is involved in various activities related to oil and natural gas, chemicals, power generation, renewable energy resources, and other energy-related businesses.
We believe that Shell offers meaningful long-term upside potential for investors and maintain our Outperform rating on the stock. However, the company faces stiff competition from peers such as BP plc (BP) and Exxon Mobil Corp. (XOM).
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