The agreement is likely to be announced on Monday for the $4 billion gas-to-liquid (GTL) plant that would convert natural gas into liquid such as naphtha and environment-friendly fuels.
“We are still negotiating and we hope to conclude a deal. We are not going to give a time scale,” a Shell spokesman in London said.
The project would tap into Qatar’s North Field, a vast natural gas deposit stretching off its northeast coast into the Gulf which Qatar shares with Iran across the water.
According to sources close to the deal, the new plant would aim to produce about 137,000 barrels per day of liquefied fuel.
GTL technology is relatively untested, but energy companies are hopeful that the new fuels it produces would become increasingly popular, as demand grows for less polluting diesel vehicle engines.
Liquid fuels emit fewer particulate emissions than conventional diesels and have the added advantage of making gas reserves distant from consuming regions easier to transport and thus to tap, the Shell spokesman said.
Shell has already been testing the new gas-based fuels in London and Germany.