SHELL Global Solutions, the technology arm of oil giant Royal Dutch Shell Group, is committed towards developing technology to meet the region’s energy challenge.

Vice-president (Asia-Pacific) Lee Tzu Yang said the market had no other option but to boost efficiency in order to cope with increasing production costs triggered by escalating oil prices.

“That’s where our technology comes into play. We have consistently demonstrated leadership in the development of the energy sector,” he said recently during the one-day Asia Pacific Media Technology Day in Beijing, China.

To further demonstrate the group’s commitment, it launched its latest catalyst technology, Middle Distillate and Lower Olefins Selective (MILOS), for refineries during the event. MILOS facilitates the conversion of low-quality oil into high-end petroleum products.

“The launch of MILOS marks our expansion into the licensing technologies for the energy industry,” Lee said, adding that the launch also reflected the increasing importance of its licensing business in Asia-Pacific.

Lee said oil refineries around the world had to boost the efficiency of their processing units, including by refining low-cost, low-quality oil.

According to him, low-quality oil is more difficult to process due to high contaminants levels, but recent technological breakthroughs have allowed manufacturers to extract greater profits.

Shell Global Solutions provides business and operational consultancy, technical services, and research and development (R & D) expertise to the energy and processing industries worldwide.

Its technology applies to industries such as refinery, chemicals, petrochemicals, liquefied natural gas and exploration production, metals, pulp and paper as well as support in areas such as emissions management.

Shell Global Solutions BV licensing director for Asia-Pacific, Ken C. Lai, said increasing global demand for diesel and propylene offered oil companies profit opportunities in refining low quality oil.

“Oil firms are increasing the value of their products even though they come from cheaper feedstock or raw materials,” Lai said.

He added that by using MILOS, a company was estimated to be able to save up to 15% in production costs.

“MILOS is a fluidised catalytic cracking (FCC) process which provides refiners with flexibility to obtain optimal yields of diesel and propylene without increasing the cost from using expensive special catalyst,” Lai said.

According to a study by Purvin and Gertz on oil refining and oil markets, demand for diesel from China and India are expected to grow 135% and 30% respectively from 2006 to 2020.

Group chief scientist for chemistry and catalysis Dr Carl Mesters said demand for new technology to boost efficiency was expected to increase in line with rising oil prices.

“The more precious a thing is, the more you need to make sure you take care of it,” he said, adding that the group was willing to spend a lot on R & D.

The company’s spending for R & D increased to US$1.2bil in 2007 from US$1bil in 2006.

Commenting on the gas-to-liquid (GTL) demand in Malaysia, Lai said it was difficult to gauge, as it was different from fossil fuel. He expected fossil fuel to continue to be in demand.

The existing plant is able to produce up to 14,000 barrels of GTL a day. GTL is significant as crude oil resources are depleting. GTL is a synthetic fuel, which undergoes the refinery process to convert natural gas into liquid that can be used blended with diesel.

Besides GTL, the group is also developing a second-generation bio-fuel, which is derived from agricultural waste and does not compete with the food chain.

Apart from its GTL plant in Sarawak, Shell Global Solutions also has a service centre based in the Petronas Twin Towers.

Lee said aside from its existing centre, the group was in the process of setting up a technology centre in Bangalore, India.

Petroliam Nasional Bhd is among Shell Global Solutions’ clients in Malaysia. Elsewhere in the region, the group works with PetroChina Company Ltd, Thailand’s top energy firm PTT Plc and Indonesia’s state oil and gas firm Pertamina.