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Qatar Petroleum, Shell Sign $6.4 Billion Petrochemicals Deal

Qatar Petroleum and Royal Dutch Shell Plc (RDSA) signed a heads of agreement to develop a petrochemicals plant in the Gulf country for an estimated cost of $6.4 billion.

State-run Qatar Petroleum will have an 80 percent stake in the project and Shell the remainder, the companies said today in Doha. They plan to sign a final joint-venture agreement by the end of next year or early in 2013, Qatari Oil Minister Mohammed al-Sada told reporters in the country’s capital. The project would be completed in 2017, he said.

The Shell venture would not replace one that Exxon Mobil Corp. (XOM) proposed two year ago, and the country plans more petrochemicals projects, al-Sada said. He estimated the Shell complex’s costs at $6.4 billion. OPEC-member Qatar is the world’s largest exporter of liquefied natural gas.

The heads of agreement sets the scope and commercial principals for the project, which would include a steam cracker and a mono-ethylene glycol plant with a capacity of 1.5 million metric tons a year, Qatar Petroleum and Shell said in a statement. The complex would be able to produce 300,000 tons a year of linear alpha olefins, they said.

To contact the reporter on this story: Robert Tuttle in Doha at rtuttle@bloomberg.net

To contact the editor responsible for this story: Bruce Stanley at bstanley5@bloomberg.net

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