RAS LAFFAN (AFP) -- Qatar on Thursday launched a mega gas-to-liquids (GTL) project in partnership with Royal Dutch/Shell that will cost up to 18 billion dollars, 10 billion of which have already been earmarked.

The foundation stone for a plant at Ras Laffan Industrial City, 80 kilometers (50 miles) north of the capital Doha, was laid by Crown Prince Sheikh Tamim bin Hamad al-Thani and Britain's Prince Charles, who arrived in Qatar from Kuwait on the second leg of a Persian Gulf tour.

"A total of 10 billion dollars of contracts have already been awarded for the project, including all major engineering, procurement and construction," which began in the third quarter of 2006, said a joint statement by state-run Qatar Petroleum (QP) and Anglo-Dutch energy giant Shell.

"The total cost of the project will be around 12 to 18 billion dollars," Simon Buerk, external affairs manager for the Middle East, South Asia and North Africa at Shell Gas and Power, told AFP on the sidelines of the ceremony.

A development and production-sharing agreement on the new project, dubbed Pearl GTL, covers offshore and onshore project development and operation, with Shell providing 100 percent of funding, the statement said.

"Upstream 1.6 billion cubic feet (45.3 million cubic meters) of wellhead gas will be produced, transported and processed per day to produce 120,000 barrels of oil equivalent per day of condensate, liquefied petroleum gas and ethane," the statement said.

Downstream dry gas will be used as feedstock to produce 140,000 barrels per day of clean, high quality GTL fuels and products.

The plant "is expected to produce some three billion barrels of oil equivalent wellhead gas over the period of the development and production sharing agreement," it added.

Qatari Energy and Industry Minister Abdullah bin Hamad al-Attiyah, who chairs QP, said in remarks published Thursday that production would start in 2010.

The Persian Gulf state's giant North Field has proven reserves of more than 900 trillion cubic feet (25 trillion cubic meters) of natural gas, amounting to more than 15 percent of global proven gas reserves.

"Pearl GTL will help create upstream and downstream value for Qatar by converting natural gas into clean, valuable liquid hydrocarbon products," said Royal Dutch/Shell chief executive Jeroen van der Veer.