Shell uses new refinery new reffinery to support sustainability - Essay Example

GTL Project by Shell for Improving Sustainability GTL (gas-to-liquid) is a partnership project plant between Shell Company and Qatar, which is country in the Middle East. The project is designed to transform natural gas into an odour-free and, pollutant-free fuel. The project is very important to both Shell as a company and thus the need to roll out the plan. The project is the largest of this kind to date and Shell is likely to benefit handsomely by reaping very high revenues if it succeeds. The natural gas market is already flooded and such a project might be a source of increased revenue to Shell.

In addition to being a big project, the new transformation process has the potential of creating a new natural gas, which would contribute to earnings for the company. GTL gas is priced at roughly half the normal price of crude oil, which is likely to spur increased demand mostly due to lower natural gas prices. Shell is also likely to win the environmentally conscious consumers and businesses since GTL is purer than the traditional crude thus having a competitive edge over other companies in the energy business. 2. The process of GTL however, has various production and operational barriers.

The process is extremely expensive, considering the amount invested in the project, which is $ 19 million, and this has drawn the attention of critics who hold the view that alternative procedures are more cost effective. Moreover, the GTL process consumes a lot of energy, hence posing the question of the effectiveness of the projects’ environmental sustainability. Another barrier facing the venture is the fact that the GTL project can only make profits when oil prices are high and thus the company’s stakes are either a loss or a win with this particular venture.3. In the event of the project’s failure after 5 years, the company should not abandon the project all together.

With the experience it had with a similar project in Malaysia, this should be an indication that the company should remain optimistic and keep the project running. The company should take into consideration the experience with the previous project to know what to do and what to avoid in this particular venture. Having worked through the numerous glitches in the GTL process, the company should be more confident in undertaking this particular project. Finally, Shell stand s to win more profitable relationships in future in case this project succeeds in the rich labour and energy resources Qatar.

Thus, Shell should consider continuing with the venture even if it was to fail after 5 years.