Pearl GTL: The World's Largest Gas-to-Liquids Plant Set for Production

THE HAGUE, March 23, 2011 /PRNewswire/ -- The world's largest plant to turn natural gas into cleaner-burning fuels and lubricants took a major step closer to production today when gas began flowing from a giant offshore field.

To view the Multimedia News Release, please click:

http://multivu.prnewswire.com/mnr/prne/shell/48891/

Pearl GTL will process around 3 billion barrels of oil equivalent over its lifetime from the world's largest single gas field, the North Field in the Arabian Gulf. The field stretches from Qatar's coast and contains more than 900 trillion cubic feet of gas, equivalent to 150 billion barrels of oil, or over 10% of worldwide gas resources.*

The gas-to-liquids (GTL) plant - a joint development by Qatar Petroleum and Shell (NYSE: RDS.A) (NYSE: RDS.B) - will add almost 8% to Shell's production worldwide - making it the company's main engine for growth for 2012. It has a capacity of 260,000 barrels oil equivalent a day and is expected to ship its first product in 2011 and reach full production in 2012.

"We're on the verge of starting up a project that will be a foundation for Shell's future growth for decades to come," says Shell's Country Chairman in Qatar, Andy Brown. "For Qatar it means another way to generate revenues from gas reserves, in addition to selling pipeline gas or liquefied natural gas. It diversifies the country's revenue streams and provides long-term income."

The plant will produce cleaner-burning diesel and aviation fuel, oils for advanced lubricants, naphtha used to make plastics and paraffin for detergents. It will make enough diesel to fill over 160,000 cars a day and enough synthetic oil each year to make lubricants for more than 225 million cars. The products will reach customers in every major energy market through Shell's global retail network.

In bringing Pearl to production, Shell engineers have built on more than 30 years of experience in gas-to-liquids technology. We built the world's first commercial-scale GTL plant in Bintulu, Malaysia, in 1993. Pearl's output of GTL products will be 10 times greater than Bintulu's.

Safety record

Building Shell's biggest engineering project to date in Ras Laffan, a vast industrial zone on Qatar's coast some 90 kilometres north of Doha, was a major feat. At the peak of construction, it involved more than 52,000 workers from over 50 nations.

Despite the massive number of workers involved and the complexity of Pearl's construction, a strong safety culture helped Qatar and Shell achieve a record-breaking 77 million hours worked onshore without injuries leading to time off work.

Preparing for a smooth start-up

Getting the huge plant into full operation will take a series of carefully executed system start-ups. Pearl GTL's control room - the nerve centre of one of the largest and most sophisticated plants ever built in the energy industry - has powered up.

The first turbines and auxiliary steam systems have begun to generate steam and electricity to power the plant. The first two oxygen separation units are up and running.

Drilling record

Sixty kilometres offshore, natural gas from the North Field - discovered by Shell in 1971 - is now flowing from to two platforms standing in water up to 40 metres deep to feed Pearl GTL. Eleven wells were drilled for each platform in record drilling times for the field.

Two underwater 76-centimetre (30-inch) diameter pipelines are carrying the natural gas to a gas separation plant onshore that extracts natural gas liquids: ethane for industrial processes, liquefied petroleum gas (LPG) for domestic heating and cooking and condensates as a feedstock for refineries. The separation process also removes contaminants like metals and sulphur. The sulphur is turned into pellets and shipped to the nearest market to make hydrosulphuric acid, fertiliser or other valuable products.

Turning gas into liquid fuel

The pure gas, or methane, that remains will then flow to the GTL section of the plant, where it will be converted in a three-stage process into a range of gas-to-liquids products using Shell proprietary technology.

Finally, the liquid hydrocarbon wax is upgraded using specially developed technology involving new catalysts into the range of products. It takes some 2,000 steps to prepare all GTL systems for production.

In Qatar, summer temperatures exceed 40degreesC (104degreesF) and rainfall is slight. Conserving water is critical. Pearl was designed to be self-sufficient in its use of water.

Pearl, the largest investment by Shell in any single project, is a fully integrated project spanning production from an offshore gas field to finished marketable products. Shell is funding 100% of the development costs under a profit- sharing agreement with the state of Qatar.

*source: Oil & Gas Journal

Cautionary note

The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this presentation "Shell", "Shell group" and "Royal Dutch Shell" are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words "we", "us" and "our" are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. ''Subsidiaries'', "Shell subsidiaries" and "Shell companies" as used in this presentation refer to companies in which Royal Dutch Shell either directly or indirectly has control, by having either a majority of the voting rights or the right to exercise a controlling influence. The companies in which Shell has significant influence but not control are referred to as "associated companies" or "associates" and companies in which Shell has joint control are referred to as "jointly controlled entities". In this presentation, associates and jointly controlled entities are also referred to as "equity-accounted investments". The term "Shell interest" is used for convenience to indicate the direct and/or indirect (for example, through our 24% shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.

This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management's expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ''anticipate'', ''believe'', ''could'', ''estimate'', ''expect'', ''intend'', ''may'', ''plan'', ''objectives'', ''outlook'', ''probably'', ''project'', ''will'', ''seek'', ''target'', ''risks'', ''goals'', ''should'' and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this presentation, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for the Shell's products; (c) currency fluctuations; (d) drilling and production results; (e) reserve estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including potential litigation and regulatory measures as a result of climate changes; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional factors that may affect future results are contained in Royal Dutch Shell's 20-F for the year ended 31 December, 2010 (available at http://www.shell.com/investor and http://www.sec.gov - opens in new window). These factors also should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, 15 March 2011. Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this presentation. There can be no assurance that dividend payments will match or exceed those set out in this presentation in the future, or that they will be made at all.

The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this presentation, such as resources and oil in place, that SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website http://www.sec.gov - opens in new window. You can also obtain these forms from the SEC by calling 1-800-SEC-0330.

    
    More information

    For more information, interview requests or photography, please contact:

    Shell Media Relations
    The Netherlands, Wendel Broere: +31(0)70-377-8750
    International, Jonathan French: +31(0)70-377-3600