Fueling the Future

Now a first mover in the region’s GTL sector, Qatar commissioned its first GTL plant back in 2003. At that time, there were only three similar facilities in the world, operated by Sasol and Shell. Using natural gas as its main feedstock, GTL plants convert gas into low-sulfur environmentally friendly diesel, naphtha, and liquefied petroleum gas (LPG). Sensing an opportunity to both amplify its dominance in the gas sector and establish a local manufacturing industry with the capacity to export technologically advanced products, Qatar seized the prospect of creating a GTL economy-of-scale leading to widespread development.

In less than a decade, Qatar became the world’s largest GTL exporter, with a production capacity of more than 170,000 bpd. Capitalizing on the initial momentum, South African energy and chemicals company Sasol ventured with Qatar Petroleum (QP) in 2007 to launch the 32,400bpd ORYX GTL plant. Four years later, Shell entered Qatar’s GTL market to capitalize on its gas explorations of 1971. The Dutch hydrocarbon producer made its largest investment in any single project to create the world’s largest GTL plant. The Pearl GTL has the capacity to produce 140,000bpd of GTL products, which is at least four times larger than its nearest rival. It also represents nearly 8% of Shell’s total production, making it one of the company’s key projects worldwide. Putting this into perspective, Pearl GTL makes 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.

Qatar’s manufacturing sector’s solid performance over recent years underscores GTL’s rising contribution to the broader economy. However, GTL’s contribution is expected to decline this year due to low energy prices and a partial shutdown of Pearl GTL. At the same time, GTL products are becoming a popular alternative in the global market thanks to their performance benefits, chemical purity, and environmentally friendly properties. In this context, Qatar’s GTL industry will likely face competition in upcoming years from new producers that are keen to tap into growing global demand. The two regional powers of Saudi Arabia and Iran, with ample feedstock to supply the sector, have plans to launch gas projects that will incorporate GTL components. In a move to defend its position in the market, Qatar announced plans to develop an export-oriented gas project in the North Field, with a capacity of about 2 billion cubic feet a day, but did not specify if exports would be in the form of GTL products.

In this regard, Qatar is expected to continue benefiting from its established dominance in the global market, having already developed local knowledge and innovative premium products. Its wide range of finished GTL products includes diesel, kerosene, lubricant base oil, and inputs for petrochemical and detergent products. The development of the GTL industry has opened new opportunities for many other sectors such as aviation, as GTL jet fuel is now being tried on aircraft. To discuss the various benefits of the GTL industry, Doha hosts the annual World GTL Congress, bringing all the sector’s stakeholders to the capital and putting Qatar again in the spotlight of the industry.

The development of GTL in Qatar has had a double impact on the country, first in terms of generating revenues as exports, and second in the development of GTL technology. These innovations are being much sought out by the oil and gas industry, particularly from countries looking to diversify income sources from their energy reserves such as Russia, the US, and Canada. The ongoing research and continued improvement in technology further indicates that GTL will become the preferred fuel for organizations looking to minimize the negative effects of their operations on the environment, and Qatar has a headstart on this matter.