From Bintulu Shell MDS to Pearl GTL in Qatar

Applying the lessons of eleven years of

commercial GTL experience to develop a world scale plant

Lars Carlsson Manufacturing Manager Shell MDS, Malaysia

Niels Fabricius Technical Director, Pearl GTL, Qatar

Gastech 2005

14-17 March 2005, Bilbao

Executive Summary Shell’s first commercial Gas to Liquids (GTL) plant, Shell Middle Distillates Synthesis (Shell MDS) is located in Bintulu, Sarawak, Malaysia and now has a capacity of 14,700 bbls per day. It produces a wide range of high quality transport fuels, specialty chemicals and waxes, all marketed widely within Asia and Europe, the USA, Africa and Australia. The plant was commissioned in 1993 after nearly twenty years of research and pilot plant work. Although the chemistry of the GTL process is simple and widely known, making the process technically and commercially viable on an industrial scale presents huge challenges. The eleven years since start-up have been a journey of continuous learning. Key lessons and achievements have been: • steady HSE improvements culminating in twelve million LTI-free man-hours; • continuous improvements in plant and complex reliability; to reach 99% availability in syngas

production units and to achieve more than one year of continuous operation without one complex trip;

• progressive enhancements in catalyst formulation, catalyst loading and catalyst handling resulting in significant improvements of catalyst activity, selectivity and productivity;

• exploiting the unique properties of the GTL products to penetrate existing specialty markets and develop new markets that recognize the benefits of GTL products.

Making those achievements has been demanding and technically challenging, but has demonstrated that GTL technology on a commercial scale can be safe, efficient, reliable and profitable. It is this experience, which underpins the development of the world’s first world-scale GTL plant, the Pearl GTL project in Qatar, which became a reality when Qatar Petroleum and Shell signed the ‘Heads of Agreement’ in October 2003, followed by the ‘Development and Production Sharing Agreement’ in July 2004. The Pearl GTL project is a fully integrated upstream/downstream project that will produce 140,000 bbls per day of GTL products in addition to substantial quantities of LPG and condensate. The project has progressed to the FEED phase and will be approaching the EPC market later in the year. It will be constructed in two phases that will start up within about one year of each other, with the first phase starting in late 2009. The total investment cost will be around USD 6 billion. This presentation will review technical details and dimensions of this mega project and discuss how some of the many challenges and risks are being managed on basis of the lessons from Bintulu.

The GTL plant at Bintulu

1. Shell MDS in Malaysia In response to the world’s accelerating demand for energy and more stringent environmental legislation, Shell embarked, in the early 1970s, on extensive research to develop alternative sources of energy and transportation fuels. These efforts resulted in the creation of the Shell Middle Distillate Synthesis (MDS) technology. Shell MDS (Malaysia) Sdn Bhd was incorporated in 1986. A year later, the company received its project license. In 1989, Shell Gas BV signed a Joint Venture Agreement with Petronas, Diamond Gas Holding (a subsidiary of Mitsubishi Corporation) and the Sarawak State Government. The company owns and operates the Shell MDS plant, the world’s first commercial Gas to Liquids plant located in Bintulu, Sarawak, Malaysia. It is located next to the Petronas Malaysia LNG complex. (Figure 1) The plant was commissioned in 1993 and had originally been designed to convert 110 million scf per day of natural gas, piped onshore from the South China Sea, to 12,500 bbls per day of high quality GTL products. The first GTL product shipment was exported on 1st September 1993. However, production was interrupted after an explosion in the cryogenic Air Separation Unit on December 25, 1997. Reconstruction was completed in 2000 and production was resumed. Debottlenecking of the plant during the statutory shutdown in 2003, made it possible, with relatively minor modifications, to increase the maximum production capacity to 14,700 bbls per day. In July 2004 Bintulu exported its thousandth shipment of GTL product. 2. Technology and process The Shell MDS technology is a modern version of the Fischer-Tropsch (FT) process invented in Germany in the 1920s to produce liquid hydrocarbons from coal derived syngas. The Shell MDS technology, however, uses a selective and Shell proprietary catalyst, which enables the technology to be brought to full commercial operation. This technology is part of a whole suite of Shell technologies, centring around the production of synthesis gas (syngas – a mixture of carbon monoxide and hydrogen) from coal, natural gas and oil residues, and the subsequent conversion of syngas into a range of synthetic products. The Shell MDS technology focuses on the production of middle distillates from natural gas. This production process combines conventional and advanced technologies. The concept includes three basic stages as shown in figure 2, also indicating the different product groups: 1. The first stage is the production of syngas from the partial oxidation process of natural gas with pure

oxygen via the Shell Gasification Process (SGP). 2. The second stage is where Syngas is passed through Paraffin Synthesis (HPS) reactors equipped with the

Shell proprietary FT catalyst. The catalyst properties and the reactors’ conditions have been chosen to favour the formation of long-chained liquid molecules (wax) and, at the same time, to minimise the formation of gaseous compounds.

3. In the final stage, the intermediate and waxy synthetic crude oil molecules are converted and fractionated into high quality products. The predominantly n-paraffinic specialty products and waxes are purified via a HydroGenation Unit (HGU) followed by advanced fractionation techniques. Clean middle distillates and waxy raffinate (feedstock for lubricant manufacturing) are produced by means of a selective hydrocracking process, called the Heavy Paraffin Conversion (HPC), followed by distillation.

Although the chemistry of the GTL process is in principle simple and has been widely known for a long time, making the process technically and commercially viable on an industrial scale has presented huge challenges. These include: (a) processing gas with no inter-storage; (b) extreme conditions during processing, e.g. temperatures from –180°C to +1350°C; (c) extremely exothermic processes (both the syngas manufacturing and the synthesis) requiring systems to

harness the released process heat for use elsewhere in the process in order to achieve an acceptable thermal efficiency;

(d) a high degree of process and process-utilities integration (following on from (c ) creating the potential for dynamic interactions and ‘domino effect’ complex trips;

(e) very large equipment (e.g. 60+ MW compressor drives); (f) specific HSE challenges related to the handling / processing of pure oxygen, syngas (carbon monoxide

and hydrogen) and high pour point wax. The most fundamental lesson from Bintulu has been related to the challenges of scaling up from a pilot plant to a commercial one, involving: (a) achieving high catalyst performance in terms of activity, selectivity, stability, resistance to contaminants

and regenerability under industrial / commercial scale conditions; (b) reactor scale-up from less than ten tubes under pilot plant conditions to tens of thousands of tubes in

the commercial scale reactors based on the multitubular fixed bed reactor concept chosen by Shell;

Carlsson/Fabricius 1

(c) proving the reactor internals and the systems for heat removal, including its dynamics and behaviour under abnormal and emergency conditions;

(d) proving the suitability of construction materials for the extreme (e.g. high temperature, zero sulphur, reducing) conditions of the syngas and synthesis sections;

(e) proving the suitability of many prototype pieces of equipment, some of which were the world’s largest at the time of start-up;

(f) proving the operability and dynamic control of the overall complex involving intense process/utilities integration under start-up, shut-down, normal operation, regeneration and emergency conditions, including the development of detailed procedures for these cases.

3. Marketing Products all around the world The unique properties of Shell MDS products have set new standards in the fuels and specialties markets. This is because all products manufactured from the synthesis of natural gas are of very high quality, with a uniform molecular structure (paraffinic) and virtually free of sulphur, nitrogen, aromatics or other contaminants. Shell MDS products are also readily biodegradable and environmentally friendly. In Bintulu a wide spectrum of products is being produced, including transportation fuels, specialty chemicals and high quality waxes. Figure 3 shows that the products are marketed widely within Asia, as well as in Europe, the USA, Africa and Australia. The Shell MDS middle distillates and particularly the gasoil, referred to as GTL Fuel, have a special place in this palette of products. Its high cetane, low density and the fact that it is virtually free of sulphur and aromatics, make it a valuable component in blends with conventional crude oil based gasoils. Such GTL Fuel blends provide demonstrable reductions in emissions and improved engine performance in normal diesel engines. This has been demonstrated through a number of fleet trials conducted with major car manufacturers and various authorities. These include: • a trial of Mitsubishi trucks from the CO-OP company in Tokyo, between November 2003 and August

2004; • a trial of buses of the Pudong company in Shanghai, from September to October 2004. Other trials have been conducted using 100% neat GTL Fuel, and demonstrated even more pronounced reductions in emissions and improvements in engine performance. These include: • a trial of VW Golf (1.9 TDI) cars in Berlin in May to September 2003; • a 12 month trial of trucks from the Yosemite Water Company in California from June 2003; • a trial using a Daimler-Chrysler London bus July to September 2003; and • a trial of Toyota Avensis cars used by various NGOs in London from July to September 2004. The Shell MDS gasoil is also a key component of Shell’s GTL based premium diesel fuels including: • ‘Shell Pura Diesel’ launched in Bangkok in January 2020 and nationwide for all motorists in February

2002; • ‘Shell Diesel – Greece Olympics 2004’ launched in Athens, Greece for taxis and commercial vehicles in

July 2003; and • ‘Shell V-Power Diesel’ launched for all motorists in Germany in May 2004 and in The Netherlands in

August 2004.

In all these locations these premium fuels have been very successful and are seeing constantly increasing demand from customers As an example of the emission benefits of Shell GTL Fuel, Figure 4 shows results from the VW trial in Berlin, comparing the emission performance of the standard VW Golf fuelled using so-called ‘sulphur free’ (less than 10 ppm) conventional diesel with the performance using 100% pure Shell GTL Fuel. Significant reductions in emissions were achieved in all areas – most notably the 26% reduction in particulates, 63% reduction in HC emissions and no less than a 91% reduction in CO emissions – demonstrating the clean burning nature of GTL Fuel. 4. Eleven years of commercial experience The plant was commissioned in 1993 after nearly twenty years of research and pilot plant work. Although the chemistry of the GTL process is basically simple and has been widely known about since its invention in Germany in the early 1920s, making the process technically and commercially viable on an industrial scale presented huge challenges. The eleven years since start up have been a journey of continuous learning. 4.1 Commitment to Health, Safety and Environment Shell MDS is highly committed to achieving the highest standard of HSE policies and practices, and excellent

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HSE performance is considered of paramount importance for the business. Staff need to feel safe in the workplace. It is also clear that setting and reaching high HSE standards is one of the best ways of meeting the other business targets. The successful certification of the Shell MDS Occupational Health and Safety Management System to OHSAS 18001 and of the Shell MDS Environmental Management System to ISO 14001 is testament to our commitment to pursuing our goal of causing no harm to people and to protecting the environment. In 2002 Shell MDS received the Sarawak Chief Minister’s ‘Environment Award’ in the Large Enterprise Category and in 2003 the ‘Grand Award’ of the Malaysian Society for Occupational Safety & Health, the highest recognition in Malaysia in the area of HSE. In 2004 the milestone of twelve million LTI-free man-hours was reached. The footprint of GTL is widely recognised as environmentally benign. As outlined earlier, the products are paraffins and virtually free of any chemical elements that could harm the environment. Effluent water quality and stack emissions are continuously monitored and reported both to the authorities and to the Shell Group and are generally well within international standards. At the Bintulu plant treated effluent water is discharged into to the sea – in accordance with environmental regulatory limits, but recycling or using the effluent water for irrigation is technically feasible based on chemical and biological specifications, with the application of available tertiary treating technology. The bio sludge from the effluent water treating plant is presently being used as landfill. In cooperation with the Universiti Malaysia Sarawak (UNIMAS) a study, “ SMDS bio sludge - from waste material to useful by-product” has been carried out. It confirmed that the bio sludge, originating from a clean natural gas resource, is also fully environmentally compatible. 4.2 Continuous improvement in complex availability The on-stream availability of the plant in the first years of operation was low. It was not unusual to experience an unplanned complex shut down every 14 days and after each of these shutdowns it takes two to three days to re-start the complex and to bring it back to full production. Apart from the production losses and possible consequential equipment damage the many shut downs also caused frustration amongst the staff. That situation has now changed dramatically and today the on-stream availability in syngas production units has reached 99%, while a total run period between complex shutdowns of 430 days was achieved during 2004. (Figure 5) The root-causes for poor availability were combinations of simple and complex problems, largely related to:

(a) the novelty of the combination of processes and the main equipment; (b) the dynamics of integrated gas-processes; (c) the strong interaction between the processes and the utilities; (d) over-protection of the processes and individual equipment; (e) insufficiently robust instrumentation; and (f) unreliability of prototypes.

As Bintulu was the first plant in the world of this kind, a period of teething troubles in the first few months had been anticipated but clearly this lasted longer than expected. The unreliability of prototypes at both unit and equipment level, particularly in vendor packages, was a problem which had not been sufficiently recognised. What had been “proven technology” actually required a long learning process, often with the assistance of vendor experts on site to reach mature reliability. The issues relating to the dynamics of the integrated gas process have been addressed largely by process control and advanced process control techniques. To bring the utility supply to the required standards additional boiler capacity was installed in 1996. The Shell MDS complex is effectively self sufficient in power supply. Two independent feeder connections with the regional power supply have nevertheless been installed to also ensure 100% availability of this vital utility. The core HPS synthesis process and the downstream hydrogenation- and hydro-conversion-processes operated quite smoothly from the start. The reliability of the “Instrumented Protected Functions” have over time been improved via:

(a) a systematic approach to bad-actor elimination; (b) removal of redundant safeguarding systems; and

(c) upgrading of critical safeguarding functions to the required levels of robustness, whereby HAZOP studies in combination with the IPF methodology have been used to guide this process in a responsible and cost effective manner.

High availability, particularly of the gas processes is key, as the absence of buffer capacity for lost syngas

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means production can never be recovered. State of the art inspection and maintenance strategies are therefore also imperative to ensure near perfect reliability and availability. The “Reliability Centred Maintenance” methodology has been adopted in Bintulu on the most critical process units to optimise the balance between preventive and reactive maintenance. Maintenance and repairs are further always planned together with, for instance, the regeneration of the synthesis catalyst.

The “Risk Based Inspection” methodology has been adopted to guide efficient and cost effective inspection programs. The complex has to this end been sub-divided into different and characteristic “corrosion loops”. Metal dusting, CO/CO2 stress cracking corrosion and organic acid corrosion are in this context corrosion phenomena that are typical for the GTL technology. GTL processes are in nature very clean. Hence, unlike crude oil refining, fouling is only of a secondary importance.

Most importantly, all the lessons of the Bintulu experiences have been meticulously recorded. An ‘Incident Reporting’ database was established in 1993 before the first start-up and serves today as an extremely valuable tool for Shell’s further GTL developments.

The success in applying these many lessons was also reflected in the start-up after the re-build in 2000. Several improvements were introduced in the re-build, and applying the accumulated lessons in combination with Shell’s ‘Flawless Start-up Program®’, this time the plant was started up very smoothly and fully in line with expectations. 4.3 Progressive Performance Enhancement The syngas manufacturing in the SGP process is tuned to make carbon monoxide and hydrogen very efficient out of natural gas and oxygen from the air separation unit. The conditions in the “Heavy Paraffin Synthesis” or HPS process have been designed such that the carbon monoxide is converted with a high selectivity into long-chain hydrocarbons with a minimum formation of gaseous compounds. To enable the high selectivity Shell has opted for a multi-tubular reactor concept and the Shell proprietary synthesis catalyst has been designed for this purpose. To optimise the performance of the synthesis catalyst it can be regenerated in-situ. The lifetime of the catalyst is typically five years, while the cycle length between regenerations is typically one year. Over the years valuable experiences have been gained on the catalyst performance under industrial conditions (as compared to laboratory / pilot plant predictions). This includes the resistance of the catalyst to contaminants, the functioning of the industrial scale contaminants removal systems as well as the catalyst loading, activation and regeneration procedures. A lot of efforts have been directed towards tuning the severity in relation to the regeneration frequency to achieve the optimum productivity and efficiency over the catalyst life cycle. The experience in the 1990s had shown that the syngas manufacturing units had surplus capacity and that the conversion capacity in the synthesis section was the complex constraining factor. In the late 1990s Shell’s R&D developed a better catalyst (the so-called second generation catalyst). It allows a higher productivity per reactor volume and it also gives a better selectivity to liquid products. Applying this catalyst in Bintulu meant that the reactor system would more than utilise the existing surplus syngas manufacturing capacity and as such cost effective debottlenecking came within reach. The rebuild air separation unit, after the explosion of 1997, was prepared for a 20% capacity increase. The actual debottlenecking project – consisting of relatively minor modifications - was implemented during the statutory shutdown in 2003. The present nameplate capacity is 14,700 barrels per day. The combination of the world-class reliability and availability with the much improved process performance resulted in a continuous improvement in the thermal efficiency and flaring of excess process gases during disturbed conditions is now a rare occurrence. The lessons from the product upgrading processes has focussed primarily on making the optimal yields of the desired products, a key contributor to the success of Shell MDS as a business. The process performance of the hydrogenation (HGU) and hydro-conversion (HPC) units and of the separation sections has proven to be very efficient and robust from day one. One good illustration of this reliability is the fact that the original batch of the HPC catalyst, loaded in 1993, was only replaced in 2003, and even then not because it had reached end of its life, but because the reactor internals had been modified in the scope of the debottlenecking project to allow more catalyst in the original reactor vessel. 4.4 The journey continues Over the past eleven years, and particularly since the restart in 2000, the Shell MDS business has been turned around. A new technology that suffered from serious reliability problems has been transformed into a safe, efficient, reliable process that supports a profitable business. It has been a long and challenging learning phase in which extremely valuable knowledge about GTL commercialisation has been gained. This is not so much knowledge about how the basic technology works – that had been acquired in the R&D and pilot plant phases but the detailed expertise on how to operate GTL technology on a commercial scale and as a business.

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A final and very important element of the lessons learned during the eleven years of operation of the Bintulu plant is the development of the people involved. This has greatly enhanced Shell’s work on the next generation of GTL plants – offering the opportunity to rotate people between the Bintulu plant, the R&D teams, the design teams and the project teams – all ensuring a higher degree of realism is applied to the new projects.

5 . Pearl GTL Project in Qatar The Pearl GTL project in Qatar is a fully integrated upstream/downstream GTL plant of 140,000 bbls per day of GTL products covering all aspects if the value chain from the reservoir to the marketing of products. At the heart of this project is the development of an area of the North Field to produce some 1600 million scf per day of wellhead gas. At the heart of this project is the development of an area of the North Field to produce some 1,600 million scf per day of wellhead gas. The onshore plant will consist of two parts: firstly a traditional gas plant for the treating and processing of rich, sour gas from the North Field. This will produce substantial volumes of condensate, LPG (at a later stage also ethane) as well as the methane-rich natural gas. Secondly the GTL plant, which will process the methane-rich natural gas, turning this into 140,000 bbls per day of GTL products. In addition to the main products of naphtha (for chemical feedstock) and gasoil (the unique GTL Fuel) the plant will also produce smaller volumes of specialities: n-paraffins (a precursor to detergents) and lubes base oils, products with unique properties. The construction of the plant will take place in two phases, each of 70,000 bbls per day GTL products. The two phases will be constructed ‘back-to-back’ and completed within about 12 months of each other, with the first starting up late in 2009. (Figure 6). The project’s commercial framework, a Development Production Sharing Agreement (DPSA), takes a novel approach in that it applies not only to the upstream but also to the entire downstream section and is a clear example of the progressive commercial thinking shown by Qatar Petroleum. In accordance with this DPSA Shell is providing 100% of the investment in the project and the current estimate for the total investment is around $ 6 billion. The Pearl GTL plant is an attractive and economically robust project in itself, but the importance of the development goes well beyond the project. It provides the platform for the growth of an entirely new industry, the GTL industry. The unique properties of the GTL products, in particular the GTL Fuel, open up new growth markets. This provides a very exciting opportunity both for Qatar and for Shell, in creating a business, which has the prospect of major growth and the delivery of long-term value. It is a project of impressive dimensions. However, in contrast to some other GTL projects, it is based on a tried and trusted GTL technology, the Shell MDS technology, as described earlier, which has been in commercial operation at the Shell MDS plant in Bintulu since 1993. 5.1 Offshore Scope The offshore section of the project is based on well-known and tested ways of gas production and is relatively straightforward compared to the complex onshore section, although it still presents its own challenges. In each phase of construction there will be a simple steel jacket wellhead platform for the upstream gas production and, since no processing will take place on the platforms, these will be unmanned. Wellhead fluids (wet and sour) will be transported to shore via two 30-inch multi-phase pipelines constructed in carbon steel. Corrosion control is therefore a critical issue and will be based on corrosion inhibitors. Hydrate control, an equally vital issue, will use the state-of-the-art technology of Low Dose Hydrate Inhibitor (LDHI) rather than the conventional MEG injection. While it is now marketed by others, the LDHI technology was originally developed by Shell. Where it is appropriate, Shell will continue to apply the latest technology also in the offshore scope. 5.2 Onshore Scope The onshore plant will be located in Ras Laffan Industrial City some 80 km northeast of Doha. The overall plot layout is depicted in Figure 7, showing, on the upwind west side of the plant, eight world scale Air Separation Units (ASU), each with a capacity of 3,600 tons per day of high purity oxygen, thus producing a total of 28,800 tons per day of pure oxygen. This is the equivalent of the oxygen consumed daily by approximately 70 million humans. Adjoining these and heavily integrated with the ASUs (being the largest energy consumers), is the central utilities area with a very comprehensive steam and power system making the plant self sufficient in power. On each side of the central utilities area are the two trains of GTL processes with modular sections for syngas manufacturing and the Fischer Tropsch synthesis and almost an entire refinery for the products work-up including conversion and fractionation facilities. Further downwind is the gas processing plant with gas

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treating, condensate stabilisation and treatment, and the sulphur processing. At the easternmost end of the plot are the water treatment facilities, which alone are very major facilities, to produce water of high purity, suitable for recycling or for irrigation usage. Lastly there are product storage areas and various general facilities: offices, workshops and warehouse and service facilities. 5.3 Project Progress Shell’s first proposal for a GTL plant in Qatar was made to Qatar Petroleum in July 2001, a ‘Statement of Intent’ was signed in February 2002, and the comprehensive Heads of Agreement (HOA) was signed in October 2003. Pre-FEED was completed and the FEED phase started in March 2004. The FEED is targeted for completion 1st May 2005; EPC tendering will take place during the second half of 2005. It is expected that the onshore EPC contract will be let in early 2006 with completion of construction and commissioning and start-up of phase one of the project in late 2009 and of phase two one year later. There has already been tangible progress on the ground in Qatar. This includes the acquisition of 3D seismic data for an area of some 800 km2 covering the area of the North Field provisionally allocated to Shell. This was already completed in 2003 with the purpose of acquiring data to provide input both into the extensive subsurface modelling and to optimise the exact well location for the appraisal well drilling with a view to minimising drilling hazards. The appraisal drilling was initiated shortly after the signing of the HOA in October 2003. The first well was spud on 14th February 2004, after the preparation for this work, something which under normal circumstances could take up to a year, was completed in less than four months. That included establishing all the systems and procedures, including the well completion design and the testing programmes and some 40 procurement and services contracts, all of which needed approval in a joint Qatar Petroleum/Shell Tender Committee. One of the largest contracts was for a drilling rig. Shell managed to contract the ENSCO 96 rig, which had already been used to drill in the North Field. (Figure 8) The first well is a ‘Data Well’ with the purpose of confirming the gas compositions assumed in the design and used as a basis for assessing the economics of the project. This well will later be converted into a development well. This well was completed on 31st August 2004. The second well will delineate the area and will later be abandoned. This well was spud on 4th September 2004 and completed in record time and well under budget on 12th December 2004. Work on the Front End Engineering Design (FEED) is conducted in two locations. For the Offshore FEED in Shell offices in Aberdeen. This has progressed fully in accordance to plan with completion in March 2005. The Onshore FEED is being carried out with the assistance of JGC through their JV company with KBR, MW Kellogg in London. This is a massive job requiring approximately half a million man-hours and involving some 270 JGC staff in addition to a Shell resident engineering team of about 30. Minor elements in the contract will be undertaken in JGC’s office in Yokohama and in KBR’s office in Houston. This work is on track for completion 1st May 2005. A critical aspect of the entire project is the EPC contracting for the onshore scope. The strategy is to let one single lump sum contract for this, something of a novelty considering the very large contract value, but deemed optimal in view of the very integrated nature of the onshore facilities. The pre-qualification for this is complete and the commercial ITB was issued on the 19th of January to qualified consortia with the technical specification to be issued after completion of the onshore FEED. 5.4 Onshore Dimensions and Challenges The onshore scope clearly makes this a very big project – as big as some of the world’s largest oil refineries and petrochemical complexes. Shell has certainly built projects of these dimensions before but this will by far be the largest construction project ever undertaken in Qatar. In almost all dimensions, the metrics of this undertaking are truly massive, as reflected in figure 9. This includes: • The process itself: more than a giga-watt of shaft power to drive compressors and pumps, generation of

some 8,000 t/hr of steam, application of 5,630 tonnes of catalyst of which the 4,800 tonnes of synthesis catalyst has a surface area equivalent to the surface whole of England.

• The FEED: this will end up with about 140 large volumes to contain in total about 4,000 design documents – of which, for example, some 900 Piping & Instrumentation Diagrams (P&IDs).

• The plot size of approximately 1.6 by 1.4 km or 230 hectares – is bigger than more than 450 football fields.

• The other construction quantities: in total some 2,300 equipment items (some four to five times of what is required for a two train LNG plant), more than 24 big lifts of more than 1,000 tonnes, in total some 2,300 equipment items, weighing approximately 100,000 tonnes and enough concrete to build 5 CN

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Towers as in Toronto – the tallest building in the world. In total the project will require the import of some 4 million freight tonnes.

• The start-up challenges: some 15,000 activities to be completed and in the course of this more than two million individual checks.

All in all this presents some significant challenges but those challenges can be managed by detailed early planning and identification of risk. The project applies a rigorous risk management system with the classical steps of identifying, assessing and responding to risks, applying a state-of-the-art web based risk management tool. In itself this is not necessarily sufficient to meet the challenge of risk management. It needs to be applied with a high degree of discipline and rigour across all areas of the project, the technical as well as the non-technical, and across the entire organisation through all phases of the project. Many of the major implementation risks in the project risk register are quite obvious and many are related to external factors, most notably that of ‘concurrent projects’. The sheer scale and number of projects underway in Qatar presents real challenges. Huge levels of investment are planned over a relatively short period of time, and this will require equally significant quantities of materials such as cement, structural steel, piping, cabling, and equipment to be imported into Qatar and transported to the construction sites, presenting a major logistical challenge to Qatar’s infrastructure. This is obviously an area which calls for joint planning and coordination between all projects, the Ras Laffan Industrial City authorities, Qatar Petroleum and other Government agencies, and work to help achieve that coordinated approach is in progress. 5.5 Building on the Bintulu experiences For a project the size of Pearl GTL, a start-up and initial performance similar to that in Bintulu in 1993 would clearly be unacceptable. Serious efforts have therefore been undertaken to utilise the Bintulu experiences to build an acceptable confidence in achieving the assumed start-up and initial operating performance. This includes the following: • Application of the same basic GTL technology as in Bintulu with only minor scale-up on the equipment

level. While the overall capacity scale-up is a factor of approx. ten, the maximum scale-up at equipment level is about 3.5 through the application of multiple modular sections / equipment.

• Where deviations from the Bintulu design or otherwise unreferenced configurations or equipment are applied to achieve improved performance or to suit the specific conditions in Qatar a rigorous risk analysis has been applied including the development of mitigation measures, fall-back options and testing requirements.

• Inclusion in the Research, Development, Design and Project teams of people with prior experience in the Bintulu operation. Furthermore, staff for the start-up and operation of the Pearl GTL plant will be trained in Bintulu over the coming years as well as further staff from Bintulu seconded to Pearl GTL.

• Continuous close contact between the Bintulu technical staff and the R&D and design staff working on Pearl GTL on the ongoing operation in Bintulu, as well the testing in Bintulu of proposed new developments in process and engineering. An example of this is the new 2nd generation synthesis catalyst, which is being applied in Bintulu.

• Involvement of experienced Bintulu staff in various challenge sessions on the Pearl GTL design, e.g. for operability studies, for novelty and prototype identification and value engineering workshops.

• Rigorous application of the Bintulu ‘Incident Database’. This originally contained the lessons of thousands of incidents during 1993 - 2004, but has been rationalised to some 800 generic ‘lessons learned’. These have been applied in the evaluation of the robustness of the Pearl GTL design and as input to the ‘Flawless Start-up Programme®’.

• As successfully applied to the Bintulu start-up after the re-construction (as well as in several other major Shell projects), Pearl GTL will apply the ‘Flawless Start-up Programme®’. This is a Shell developed programme, which in essence is a Quality Management system designed to provide rigorous identification and mitigation of potential ‘flaws’ in start-up and initial operation. This has already been applied in the FEED phase (during which a total of some 1,900 potential ‘flaws’ have been identified) and will require significant further efforts throughout the EPC phase.

6. From Bintulu Shell MDS to Pearl GTL Summarising the Pearl GTL story to date it can be said that: • the project has already seen sustained progress in many areas and the resources are in place to ensure

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this progress is maintained through to the planned completion date; • while the project is of huge dimensions, and poses many challenges, those challenges are

manageable though will require continued investment in Qatar’s infrastructure to deliver this and other projects;

• as the first world-scale GTL plant, Pearl GTL is more than just another project. It signifies the birth of an exciting, entirely new growth industry based on unique products and it will deliver long-term value for both Qatar and Shell; and

• Pearl GTL is underpinned by Shell’s significant GTL experience as generated through eleven years of operation of the Shell MDS plants in Bintulu, a period characterised by continuous learning that has demonstrated that GTL technology on a commercial scale can be safe, efficient, reliable and profitable.

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 products

Produces clean fuels and speciality products

Worldwide marketing

Air

Air Separation Conversion

NG Feed

Gasification

Synthesis

Byproducts: Liquid Nitrogen, Water, Biosludge

Separation

- Speciality- Chemicals- Waxes

HydrocarbonProducts

- Naphtha- Kerosene- Gasoil- Waxy Raffinate

L-P

Wax

Solvents, LDF,

WR, waxes

Solvents

LDF,HDF

Naphtha

L-P

Wax

WaxWRHDF

Gasoil

Solvents, LDF,

WR, waxes

Wax

LDF,HDF

Naphtha

LDF = Light Detergent Feedstock (n-paraffins)HDF = Heavy Detergent FeedstockWR = Waxy Raffinate

Gasoil

Max

imum

day

s be

twee

n co

mpl

ex s

hutd

owns

0

50

100

150

200

250

300

350

400

450

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

5679

141

8571

114

157

270

430

NOx Partikel·10 HC CO

0,1

0,2

0,3

Emis

sion

swer

te [

g/km

]Grenzwerte EU IV

Diesel < 10ppm SShell GTL Fuel∆NOx= - 6,4% ∆Part. = - 26%

∆HC = - 63% ∆CO = - 91%

EU IV

Berlin fleet test 2003 - VW Golf 1.9 TDI

North Field

Ras Laffan

Doha

EthanePropaneButaneCondensateSulphurGTL NaphthaGTL Gasoiln-ParaffinsBaseOilsWater

Wellhead platforms

Multiphase pipelines

Onshore Plant

Figure 1: Bintulu overview Figure 2: Production process

Figure 3: Marketing products worldwide Figure 4: VW trial results

Figure 5: Plant availability Figure 6: Pearl GTL project

Carlsson/Fabricius 9

Process:Shaft power consumption 1,100 MWHeat consumption 850 MWSteam generation 8,000 tons/hrCatalysts (5 processes) 5,630 tonsControl loops 4,000

FEED:Number P&IDs ~ 900Number documents ~ 4,000Number Volumes ~ 140

Construction:Plot area: 230 haEquipment number 2,300 itemsEquipment weight 100,000 tons Piping 50,000 tons Structural steel 30,000 tons Concrete 200,000 m3

Cables 1,800 kmInsulation 700,000 m2

Heavy lifts > 1,200 tons > 24

Commissioning & Start-up:Mitigation of ~ 2000 ‘flaws’Checks > 2 millionActivities: ~15,000

Air SeparationUnits

GTL Process

Utilities

Gas ProcessingStorage Water Treating

N

Figure 9: Dimensions of the project

Figure 7: Plot layout Figure 8: ENSCO rig

Carlsson/Fabricius 10

© Shell International Limited (SI), 2004. Permission should be sought from SI before any part of this publication is reproduced, stored in a retrieval system, or transmitted by any other means.