In Qatar, global oil giant Shell is spending £12bn to build one of the world’s largest oil and gas facilities. Antony Oliver visits the massive Pearl Gas to Liquid plant to find out how such a massive project is managed.
From a distance the construction site for Shell’s $19bn (£12.2bn) Pearl Gas to Liquid (GTL) facility in Qatar looks very like any other petrochemical processing plant.
But as you get close to the site, set in the desert landscape of Ras Laffan Industrial City, the difference in scale becomes clear. Make no mistake, this is a big operation.
At 10 times the size of Shell’s last GTL plant in Malaysia built nearly 20 years ago, the 1.5km x 1.5km site is packed with a mind-boggling array of gargantuan pipework, pumps and pressure vessels all built on huge concrete racks to a height of up to and over seven storeys.
“Our major construction phase finishes this year. Next year we will start making product and ramp up to full production”
Andy Brown, Shell
In temperatures touching 45°C, some 50,000 workers are now crawling all over what is effectively a giant chemistry set. They are working flat out to get the project completed and commissioned in time for a planned start-up in early 2011.
Shell has been working with Qatar Petroleum (QP) on the Pearl GTL project since 1996 and, as the largest GTL project in the world, it is central to QP’s desire to add more value to the gas it is currently extracting from the state’s huge North Field.
Shell’s largest investment
“This is the largest investment by Shell in any single project,” explains Shell executive vice president and Qatar country chairman Andy Brown. As managing director of Pearl, he has been living and breathing this project from the start.
“Our major construction phase finishes this year and during next year we will start up and start making product and then ramp up [to full production], which should take around 12 months.”
Brown has been intimately involved with the whole commercial and design process of scaling up from Shell’s first commercial GTL plant in Bintulu, Malaysia, which delivers some 14,700 barrels a day of GTL product. Until now Bintulu has carried the torch for Shell’s unique process.
By contrast, Pearl will process some 1.6M.ft3 gas a day to produce 140,000 barrels a day of GTL products such as naphtha for the petrochemical industry, paraffin, kerosene including aviation fuel, petrol and base oils plus another 120,000 barrels a day equivalent of natural gas liquids and ethane.
Because the GTL process requires the gas to be purified and scrubbed of impurities such as sulphur, the resulting products are cleaner and much more energy intense than oil derived alternatives.
“Time is money and when you are running with 50,000 people and a very large overhead, the critical path gets a lot of attention”
Andy Brown, Shell
And it is not to be confused with the wholly different Liquid Natural Gas schemes of which there are several at Ras Laffan. These simply chill and compress into liquid form raw gas from the North Field, ready to be shipped around the world in special container ships.
“Gas to liquid is a process where you chemically change the gas into a liquid fuel,” Brown explains. “It is not just an energy project. You actually create products that are more valuable than the gas. So for the State of Qatar it is an upgrade of their product.”
And while Shell is not alone in the GTL business, it has been developing and scaling up its unique fixed catalyst process since it began its first laboratory work in 1973.
The company created a pilot plant in Amsterdam in 1983, opened the Bintulu plant in 1993 and, in the process, has filed some 3,600 patents to protect its GTL process.
“We have taken a relatively conservative approach to the scale up [from Bintulu],” says Brown. “What we wanted to do was build on our success but do something where we had reasonable confidence that we would get what we expect in terms of product.”
Key to this conservative approach was to build the plant around two parallel production trains rather than just make things bigger, thereby utilising as far as possible multiples of known equipment and the biggest reactor pressure vessels that it knew could be efficiently constructed.
The result has also meant that the construction process could be phased around the two trains or production streams, one following and learning from the other as this giant three dimensional reinforced concrete and steel jigsaw puzzle is assembled.
Of course, while there is a huge amount of highly technical and complex chemistry going on in the catalytic stage at the heart of GTL process (see box), it all fundamentally relies on lower tech utilities to keep the whole plant functioning
The size and scale of these utilities is vast. For example the steam system delivers 8,000t of steam a day - the largest in the world; the oxygen system delivers 28,000t a day - the largest in the world; the effluent clean up system treats 1,3M.l a day and is the largest zero liquid discharge system ever built. A process automation system is also being installed by Honeywell - the largest ever installed in the world.
The list of huge numbers goes on: 1,200 MW of rotating equipment capacity, 730,000m3 of concrete poured, 250,000t of structural steel placed and 2M.t of imported raw material.
15 main contractors
The project is managed by Shell but with Kellogg Brown & Root (KBR) acting as management contractor alongside Japanese specialist contractor JGC. Construction work is being carried out by around
15 main contractors with specialist welders, fitters, scaffolders, concreters, insulators electricians and a plethora of required trades.
One of the biggest challenges has been around managing the 380M man hours worked so far and involving up to 50,000 people. Even today as the midday temperatures push 50˚C, they are still averaging over 10M man hours a month.
When working on a project which is effectively in the middle of the desert and over an hour from the capital Doha, the key is look after, train, develop and entertain such a large workforce, not least since virtually all are migrants from India, Pakistan and Indonesia.
Shell’s response is the Pearl Village, a purpose built town for 40,000 people complete with all the utilities, entertainment and social facilities you might find in any other town (see box).
“One of the lessons is to have a very good front end definition of the project - we spent a million hours on design before we launched the project”
Andy Brown, Shell
Right now 1,800 people are employed simply to run the village, providing food, laundry services, security, running sports facilities and events as well as operating medical and welfare facilities and, most important, training.
“We believe that, to be successful, we have to look after the people and care for them and create and environment that is home away from home,” explains Brown.
“But we also have to train them and develop them as individuals. You create a community and the right environment to learn and that means you have an ability to get performance.”
Of course by the end of 2011, as the construction ramps down, the 50,000 people on site will fall dramatically.
When it starts operating, the Pearl GTL plant will be run by around 800 staff, of which only 100 will be on site at any given time.
But right now construction work is in full swing with the first train entering its commissioning phase and the second rapidly heading towards completion. Getting to this stage has, says Brown, been a mammoth task and has required the whole team to pull together as one.
“Safety and quality drive your mindset but beyond that, at this stage in the project, schedule is everything,” he says.
“Time is money - when you are running with 50,000 people and a very large overhead, the critical path gets a lot of attention. What you need to do is make decisions.”
Brown is very proud of the plant’s safety record and without question the culture of doing things right permeates the project.
Shell’s “Flawless start-up” process has been developed over years of major projects and means that the lessons from previous projects are always embraced and built on from the start of a new job.
The desert environment and heat brings their own challenges and safety critical responses. Dehydration is top of mind and toilet walls bear colourful labels to help identify your condition from urine colour. For most visitors, a two-hour summer site tour is the limit.
On site coloured flags warn workers of the heat, air quality and rest regime required. Green flags require workers to drink one glass of water every 20 minutes while red flags indicate one glass every 10 minutes plus a 15 minute rest break in every hour. The black flags stop all work.
The emphasis on welfare also prompted Shell to ban workers - no matter how senior - from driving to site.
The roads in Qatar are reckoned to be up to 10 times as dangerous as those in Europe so by providing a fleet of air conditioned buses to transport workers to and from the village and engineers and other staff to and from Doha this whole risk has been substantially reduced.
It all adds up to a major investment by the client, but Brown says the repayment in terms of safety and productivity more than justifies it.
He adds that are still more opportunities to boost output.
“If you look at Middle East projects then you cannot help but think there are still significant productivity improvements that can be gained,” he says.
“The people that work on projects here are as industrious as those in the UK, but productivity can be three times worse.”
The cause stems from the perception that labour is cheap and so does not justify investment in supervision to drive efficiency.
This model is changing, he says, as migrant workers become wealthier and demand better wages and conditions. As a result, a change in approach is required.
Ensuring that the right people and right skills are designing and managing the project has also been critical.
Pearl has brought together many of Shell’s most experienced and technically expert staff from around the world with over 400 western expats in the project.
KBR also has around 1,500 people on the project-and each of the contractors brings its own expertise. During the design phase, Shell had 14 design offices in 10 different countries working on the project.
“Shell has a well established project management process but clearly we are adopting some of the management contractor’s ideas and techniques,” says Brown.
“One of the lessons is to have a very good front end definition of the project - we spent a million hours on design before we launched the project.
“It is really important for us to fully define the scope - you need to be firmly in control of what is going on, on the project and to keep the right level of oversight. We will tend to be quite hands on.”
But working together is, he says, vital on a project of this scale and complexity. Each individual sub-project on Pearl has an asset delivery team made up of Shell and KBR staff . It has a single focus on delivery, quality and safety.
“The second that you don’t give the contractor good guidance about what you are looking for the project can go off the rails,” he says.
“Bringing organisations with different cultural background requires work.
“We tried to create the environment where all see benefit from the success of the whole. Keeping that together all the time is tough!” he says, with a laugh.
While the relationships on site may work well, Brown says his role is to ensure that the off-site leadership is also similarly engaged and working together so as to prevent serious contractual disputes from occurring and the knock-on impact on programme costs.
Packages were split between very large specialist lump sums contracts of between £640M and £1.3bn and many smaller utility contracts let directly by the client as rate based or lump sum under English law.
“We are now building undoubtedly the largest GTL plant and have set a new benchmark in scale,” he says.
“We have multiple relationships and multiple commercial issues on-going but we try to resolve those expeditiously.”
Yet as the project moves towards completion there is a definite sense of excitement about what is being created and not least the products that it will deliver.
“GTL products are uniquely clean burning and so ideally suited to inner city use,” explains Brown referring to brands such as the Shell V-Power fuel and Helix motor oils.
“For every product I can tell you a great story about how in end use it has a very strong environmental benefit.
“We are proud of the products and the potential benefits of each one.”
The Gas to Liquid (GTL) process explained
Natural gas is piped from Qatar Petroleum’s North Field from 22 new purpose built wells drilled using Shell’s permanent Pearl 1 and 2 platforms at a rate of up to 1.6bn.ft3/day, in two 760mm diameter pipelines, 56km and 68km in length.
2. Gas processing
Raw gas is processed to remove water, sulphur and 120,000 barrels of oil equivalent of other upstream products such as propane, butane, ethane and condensate to produce methane (sweet gas) ready for the GTL process.
Eight air separation units create 28,800t of oxygen/day required for the GTL process plus nitrogen by-product by chilling the air to -180˚C.
The heat from the GTL process is used to create some 8,000t of steam a day which is in turn used to generate part of the 400MW of power required to run the plant.
4. Gas to Liquid
GTL - step one: Methane and oxygen are combined at temperatures of around 1300˚C to form Syngas, a mixture of hydrogen and carbon monoxide. Waste heat is used to crate steam for power.
GTL - step two: Syngas is converted into GTL waxes with the help of a specially developed cobalt-based Fischer Tropsch synthesis catalyst in multi-tubular fixed bed reactors. Water is a by-product of this exothermic reaction and is cleaned and processed then fed back into the steam production system.
GTL - step three: GTL waxes are converted into 140,000 barrels a day of different GTL products using selective hydrocracking under pressure and high temperature.
5. Products produced
Base oils eg Shell Helix car oils
Gasoil eg Shell V-Power diesel
Kerosene eg aviation fuel
Normal paraffin feedstock for detergents
Naphtha feedstock for plastic production
The sheer size of Pearl GTL project prompted Shell to think differently about the way it managed the construction workforce. The result was the Pearl Village, a purpose-built facility to house, feed, train and entertain around 40,000 mainly migrant workers.
Such so-called labour camps are not new to construction in the Middle East, where the labour force typically is drawn from developing nations such as India, Pakistan or Indonesia, but Shell’s approach has been more holistic than the norm.
Rather than simply providing a place to stay, Shell’s goal was to create a true “home away from home” and an environment in which workers could become part of a community outside their working lives.
The result ensures that all of its workers arrive on site properly rested, fed, trained and generally looked after physically and mentally.
“Labour camps [in the Middle East] tend to have poor levels of service. With 50,000 workers we asked ‘what are we going to do differently?’,” explains Rob Harwood, Shell head of asset delivery team GTL.
“The village is unique in the way that it is run, the events that are held and means that there is no civil unrest or real friction between workers.”
And bearing in mind that the majority of workers are away from home for months at a time and spend huge amounts of time in each other’s company, often in very hot and humid conditions, keeping moral high and relationships intact is crucial to the project.
A unique network of so-called “aunts and uncles” has also been established to help counsel and mentor the workers and to be there to talk through difficult personal or relationship issues in what can be a lonely and frightening experience.
“For some it is the first time they have lived away from home,” Harwood adds, stressing that the focus on welfare, mental health and support for workers is very important. “The aunts and uncles network and programme of 70 to 80 organised social events a week is unprecedented.”
Shell established the core services of the village and provides the central management staff - including a “mayor” - security and other welfare facilities. These include canteen facilities, laundry, a post office, religious buildings, banks, social centres and a vast array of sports facilities.
In all, 1,800 are employed, just to keep the village going.
Each contractor has built its own accommodation and facilities based around this core and management of these individual sectors is audited regularly by the mayor’s office to ensure that quality is maintained.
Recreation facilities focus around a 3km-long sports field with cricket pitches, tennis courts, basketball courts and football pitches. Organised league matches are played and provide the backbone to the male dominated community.
The rationale behind the investment is clearly about boosting the efficiency of construction operations through higher morale, fewer accidents and a better trained workforce. Shell reckons that the investment in the village has already been paid back.”Our safety record shows that this holistic approach works,” says Shell Pearl project engineer Willem Keij, referring to the fact that Pearl recently broke the Shell safety record having completed 50M accident-free hours.
“In the hot season special tool box talks are organised as part of the hazard assessments,” adds Keij pointing out that in July and August temperatures can reach 50˚C and 80% humidity. “From May onwards taking a water bottle on site is part of the personal protection equipment.”
But it goes beyond on the job training. The village facilities are intended to help workers, who often come to the project with little formal education, to develop their careers and to develop as people.
“There is a dedicated training centre that workers can attend in the evenings,” explains Keij. “Courses range from languages to computer skills and they are able to leave the project with a recognised proof of training.”
And given that the firm is ploughing some £16bn to £18bn into its capital investment programme the money spent is seen as an investment in the capability and capacity of the whole industry and with it Shell’s future.