Shell's ambitions for a possible gas-to-liquids project on the US Gulf Coast remain at a "very early" stage as it continues to gauge the long-term profitability of a such plant, the head of Shell's Qatar operations Andy Brown said Monday.
Shell has said it is looking to build a GTL plant on the Gulf Coast based on the same technology as Shell is using for its massive Pearl GTL project in Qatar.
The US plant would take advantage of the differential between the US' current low gas prices -- in the wake of a boom of shale gas developments over the last few years -- and relatively high oil product prices.
"Our US ambitions are at a very earlier stage...but there is quiet a lot of interest to export LNG from America," Brown said on the sidelines of the World Petroleum Congress in Doha.
"So that's an environment where the US will become a exporter of LNG and in that environment, clearly, GTL needs to be looked at as a project which competes with LNG," he said.
Brown said Shell is looking into a large scale GTL project, reiterating estimates that Shell's GTL technology remains profitable at $6/boe well head gas price.
"The possibility of a project in the US would come with the assumption that the gas price is going to remain relatively low," Brown said. "They are long-term projects and if we were ever going to take a position in the US we would have to have some confidence in long-term oil and gas prices in the US," he said.
In October, Shell's CFO Simon Henry said the company had done some early design work and had identified a number of potential sites for a plant but said any project would take at least six or seven years to come on stream even after a decision is taken.
Shell last week inaugurated the world's largest gas-to-liquids plant at a ceremony in Qatar's Ras Laffan Industrial City.
The $18.5 billion Pearl GTL project, developed as a joint venture between Shell and state-owned Qatar Petroleum, will produce up to 260,000 b/d of oil equivalent of hydrocarbon products, including 140,000 b/d of high-quality liquid petroleum fuels and lubricants, by mid-2012.
Brown said Shell is now looking to further "mature" the technology it uses to build its GTL plants, noting that the technology available today is "significantly better" than that it applied at the Pearl project in terms of reduced footprint and energy efficiency.
In Qatar, Shell is planning to conduct seismic exploration next year over Block D in the Persian Gulf, where it hopes to test deeper gas horizons below Qatar's giant North Field, Brown said.
Shell is exploring Block D with Qatar Petroleum and PetroChina.
