[Premium] Shell Progresses with Mozambique GTL

Anglo-Dutch major Shell is progressing with plans to develop a scalable gas-to-liquids (GTL) plant in Mozambique with an initial capacity of 38,000 barrels/day, it told NGW in a March 13 statement.

Shell and state ENH signed a Memorandum of Understanding in June 2014 to carry out a feasibility study for a potential GTL project in Mozambique, the gas to be supplied by the government from the offshore Rovuma Basin in northern Mozambique, including technical advice to support ENH in the development of joint infrastructure for a domestic gas industry.

Shell said it carried out the study with the assistance of ENH, completing it in August of 2015, and in January 2017, the government selected Shell’s Afungi GTL and 50MW to 80MW power project as one of three priority domestic gas projects through a public tender process. According to media reports, the other two were a fertiliser plant and a power project. Last June, Shell and the government agreed on an outline for the work programme and next stages ahead. "Discussions on next steps are progressing well and we are pleased with the continued support from the Government of Mozambique,’’ the statement said.

Shell had tried to access the Rovuma Basin directly, but its 2012 bid for Cove Energy, whose biggest asset was an 8.5% stake in the Anadarko-operated Rovuma Basin, was beaten by Thai PTTEP. Shell left it at that.  Anadarko-led Mozambique LNG recently secured Mozambican government approval for its LNG/upstream development plan, and is now working towards a final investment decision, with some of its offtakers expectant they may receive first shipments as early as 2023.

GTL technology uses catalysts to transform methane molecules into long hydrocarbon chains of clean-burning fuel such as diesel, as well as speciality petrochemical products. with very little impurities such as sulphur. It is an economically viable alternative to liquefying remote gas reserves and transporting the LNG to gas markets, and Shell has GTL plants in Malaysia and Qatar that are already operational.

ENH also in 2014 signed a pre-feasibility study for a potential large-scale GTL unit in Mozambique with Eni and South African oil, gas and GTL producer Sasol.