Shell, Qatar Petroleum Sign Contract for $6 Billion Petrochemical Project
Royal Dutch Shell Plc, the largest investor in Qatar, and state-run Qatar Petroleum agreed to “jointly study” an estimated $6 billion petrochemicals project in the Persian Gulf nation.
The 1.5 million-metric-ton monoethylene glycol plant may be built by 2016 in the industrial city of Ras Laffan, Oil Minister Abdullah bin Hamad al-Attiyah said today at the signing ceremony in Doha, the capital. Other olefin derivatives would boost the plant’s output to more than 2 million tons of finished products, Shell said in a statement.
Qatar, holder of the world’s third-largest gas reserves, is investing in petrochemical, aluminum and fertilizer factories as it diversifies its economy away from exporting liquefied natural gas and crude oil. The emirate aims to increase annual petrochemicals production to at least 18 million tons by 2015- 16, al-Attiyah said.
“This new project will combine Shell’s experience and technology with the ambition of the state of Qatar to create further value from its natural gas resources,” Shell Chief Executive Officer Peter Voser said in the statement.
Qatar Petroleum signed an initial agreement with Exxon Mobil Corp. in January to build a petrochemical complex that would be the emirate’s biggest single energy-related project since Shell’s Pearl gas-to-liquids plant was announced in 2006. Qatar might choose a different partner, a Qatar Petroleum official said in August.
Outlook for Exxon
Al-Attiyah declined to say if Shell’s project would replace Exxon’s venture, and he wouldn’t comment on whether Exxon would be involved in future projects in the country. Exxon’s planned facility was to include a 1.6 million-ton-a-year steam cracker, two 650,000-ton polyethylene plants and a 700,000-ton ethylene glycol unit, and was to be completed by 2015, Exxon and Qatar Petroleum said in January.
Qatar was in talks with Exxon, Shell and Chevron Phillips Chemical Co. as possible partners in construction of two facilities, Mohammed Yousef al-Mulla, head of Qatar Petrochemical Co., said on Dec. 13.
Total SA had designs ready for a new petrochemical complex in Qatar in the event that Exxon’s project, also budgeted at $6 billion, was canceled, two people with knowledge of the matter said last month.
The plant with Shell may cost about $6 billion, though the final price is yet to be determined, al-Attiyah said.
Shell has invested about $21 billion in Qatar, the world’s biggest LNG exporter. Its operations include a $19 billion gas- to-liquids plant and a 30 percent stake in the Qatargas 4 LNG project, Voser said today.
Exxon is the largest investor in Qatari plants that liquefy gas for transport by ship, with partial ownership in 12 of the country’s 14 LNG plants. Exxon is also an investor in a condensate refinery. Other international oil companies invested in Qatar include Shell, ConocoPhillips and Total.
Total owns stakes in four facilities that liquefy gas and is a shareholder in Qatar Petrochemical and Qatofin Co.’s linear low-density polyethylene plant. Qatofin owns part of a new 1.3 million-ton-a-year ethane cracker.
To contact the editor responsible for this story: Stephen Voss at firstname.lastname@example.org