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Iran says Shell to study gas-to-liquids project

DUBAI, Sept 14 (Reuters) - A unit of the Royal Dutch/Shell will study the development of a gas-to-liquids facility fed by natural gas from Iran's offshore South Pars field under an understanding signed with two Iranian state energy firms, one of the Iranian companies said.

"National Petrochemical Company (NPC), National Iranian Oil Company (NIOC) and Shell International Gas Limited (Shell) signed a Memorandum of Understanding on September 11, 2000 to study the development of a Gas to Liquids (GTL) facility fed by natural gas from the giant South Pars gas field," the NPC said in a statement, received by Reuters late on Wednesday.

It said the companies would investigate the prospects for a 70,000 barrels per day (bpd) GTL conversion plant utilising "Shell Middle Distillate Synthesis (SMDS) process as currently employed in Shell's 12,000 bpd facility in Bintulu, Malaysia."

"The implementation of the project would be based on a joint venture between Shell and NPC for the onshore part," said the statement.

It said the study was expected to be completed in the first quarter of 2001 and the plant to begin commercial operation by the end of 2005. It did not mention any cost figures.

Shell is one of a growing number of international energy companies investing in Iran in defiance of U.S. sanctions against investment in Iranian energy sector.

The Anglo-Dutch giant signed an $800 million deal to develop two offshore Iranian oil fields - Soroush and Nowruz. It is also in the running for a contract on the massive Bangestan oil field.

Iran has the world's second largest gas reserves. South Pars holds an estimated 12 trillion cubic feet of gas, or seven percent of world reserves.


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