MONTREAL (Oil Monster): Shell has partially restarted its Pearl gas-to-liquids plant in Qatar six months after the facility was disrupted by an attack during the Iran conflict, bringing some product supply back to a market still facing tight refining capacity and high transportation costs.
The restart allows Shell to begin rebuilding a limited amount of product inventory at Pearl, although the company's ability to sustain production and export cargoes remains dependent on regional security and safe shipping through the Strait of Hormuz.
QatarEnergy has also resumed offering Pearl-GTL naphtha into the spot market and has restarted some contractual deliveries, according to traders cited by Reuters.
Shell said the partial restart will allow it to build a limited amount of product inventory in storage.
The company has not indicated that Pearl has returned to full production.
The facility consists of two processing trains with combined capacity of approximately 140,000 barrels of oil equivalent per day of gas-to-liquids products.
Pearl processes natural gas from Qatar's North Field into liquid hydrocarbon products including naphtha and other fuels.
One of Pearl's two processing trains was damaged during an attack on Ras Laffan Industrial City in March.
Shell previously confirmed that Train 1 was not damaged, while Train 2 sustained damage requiring extensive repairs.
The company now expects repairs to Train 2 to be completed during the first quarter of 2027.
Shell had initially estimated that restoring the damaged train could take approximately one year.
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The partial restart is beginning to show up in physical product markets.
Traders said QatarEnergy issued a spot tender offering up to 50,000 metric tons of naphtha across four grades, including Pearl GTL naphtha, on a free-on-board basis from Ras Laffan.
The return of Pearl material is notable because product markets remain tight following months of Middle East refinery disruptions and reduced output from other producing regions.
QatarEnergy had not publicly commented on the tender at the time of reporting.
QatarEnergy has also resumed some contracted naphtha deliveries to customers.
India's Haldia Petrochemicals received approximately 50,000 metric tons for the current quarter, according to a company executive cited by Reuters.
The combination of spot and contractual deliveries indicates that some Pearl-related product flows are beginning to return even before the facility is fully repaired.
The Strait of Hormuz remains the most significant operational constraint on Pearl's recovery.
Shell said its ability to maintain safe and reliable operations depends partly on regional security and its ability to move products safely through the waterway.
Pearl had already been operating at reduced rates before the March attack because exports through Hormuz were constrained.
The entire plant was subsequently shut down so Shell could assess the damage caused by the attack.
The restart comes as global refined-product markets remain unusually constrained.
Months of reduced refinery activity in the Middle East, together with damage to Russian processing infrastructure, have limited the availability of diesel, naphtha and other petroleum products.
Industry executives have warned that refining capacity remains one of the weakest links in the global energy system even as crude oil exports from the Gulf recover.
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The Pearl restart comes as Qatar moves toward another important production milestone.
The first train under QatarEnergy's North Field East expansion is expected to begin startup operations in November, according to people familiar with the project cited by Reuters.
The expansion is separate from Pearl GTL and forms part of Qatar's much larger LNG growth program.
QatarEnergy plans to increase national LNG production capacity from 77 million tonnes per annum to 142 million tonnes per annum through its broader North Field expansion program.
Pearl GTL is the world's largest integrated gas-to-liquids facility.
The project converts up to approximately 1.6 billion cubic feet per day of wellhead gas from Qatar's North Field into liquid hydrocarbon products.
The facility is fully owned by Shell and forms part of the company's downstream supply chain, including its lubricants business.
The immediate focus will be on whether Shell can maintain stable production from the restarted portion of Pearl while regional shipping conditions remain uncertain.
Completion of Train 2 repairs in the first quarter of 2027 would move the facility closer to restoring its full 140,000-boe/d capacity.
Markets will also watch the volume of Pearl-GTL products that QatarEnergy is able to return to spot and contract buyers as winter demand increases.
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Sources: Shell; Reuters; QatarEnergy.
Courtesy: www.reuters.com
