Shell International Gas Ltd (Shell) and the Egyptian General Petroleum Corporation (EGPC) have signed, with the approval of Egypt’s Petroleum Minister, a Development Protocol for a 75,000 b/d Gas to Liquid (GtL) conversion plant using Shell’s Middle Distillate Synthesis (SMDS) process and at least one LNG train, to convert Egypt’s natural gas to environmentally friendly synthetic fuels.
The project would be developed by a joint venture between Shell and EGPC. The plant could be put into commercial operation by mid 2004 for the LNG and late 2005 for SMDS. LNG exports will be targeted at Southern Mediterranean countries.
The proposed project consists of a combined site for LNG & SMDS. Significant cost benefit could be achieved by combining these two developments into one site. Presently, West Demiatta on the Mediterranean coast, is the proposed location.
Shell already has extensive operational experience with SMDS. It currently operates a 12,000 b/d facility in Bintulu, Malaysia and is the only commercial scale GtL conversion plant of its type in existence around the world.
GtL produces oil products which will help satisfy the growing local demand of oil products/fuels. Egypt currently imports oil products but Shell believes Egypt’s increasing gas reserves can satisfy the local market for these products for more than 50 years.
GtL offers the possibility of utilizing this abundant natural resource to meet the urgent needs of the country and contribute to sustainable development in Egypt. This would create an important source of hard currency generation and would contribute to the wealth of the country.
The total direct investment in the process plant would be in the order of $1.7 billion dollars. It is expected that the project will employ some 500 to 600 people, most of them to be recruited and trained locally. During construction, an average of local 5000 workers would be required.
Shell is the world's largest private LNG company, with projects in which Shell companies hold equity (located in Brunei, Australia, Malaysia, Nigeria and Oman) accounting for around 30 million tonnes of contracted volumes out of a total of world-wide trade of 96 million tonnes in 1999.
It has been at the technical and commercial leading edge of the world's LNG industry since the late 1950s. Shell also has a significant position in LNG shipping, where it has managed the safe delivery of more than 7500 cargoes (over 25 percent of the world LNG cargoes) to date.
His Excellency Eng. Fahmi, Minister of Petroleum Affairs said: “This project is one of several highly strategic projects to Egypt. The Government will provide the necessary support to make it a successful project”.
Charles Watson, a Director of Shell International Gas Ltd. said: “We are pleased to reach this important milestone in the development of Shell’s global Gas to Liquids strategy.
Our recent advances in catalyst technology and reductions in capital costs have made SMDS a commercially attractive process for producing ultra clean fuels and oil products. We are now in a position to offer this exciting technology to countries such as Egypt.
Roger Patey, Shell Egypt Chairman said: “This is another commitment from Shell to invest in Egypt and an important addition to our growing interests in the country”.
© 2000 Mena Report (www.menareport.com)