Written on 05.12.2011 - Industry
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QATAR: Qatar and Shell sign $6.4bn petrochemical plant deal

Qatar Petroleum is constructing a giant $6.4 billion petrochemicals plant as part of its strategy to expand the downstream hydrocarbons sector. In this regard, Qatar Petroleum yesterday (4 Dec. 2011) signed a heads of agreement with Shell to construct the project, which is expected to be commissioned by 2017.

The plant, which will have a capacity of 1.5 million tonnes a year of mono-ethylene glycol and 300,000 tonnes a year of linear alpha olefins, would primarily market the products into fast-growing Asian markets.
Minister of Energy and Industry HE Dr Mohamed bin Saleh al-Sada inked the agreement with Shell CEO Peter Voser. Qatar Petroleum will hold 80 % equity and the remaining will be held by Shell.

This agreement follows the conclusion of a joint feasibility study conducted by the partners. A final joint-venture agreement is expected to be signed by the end of 2012 or early 2013.

Former Energy Minister HE Abdullah bin Hamad al-Attiyah, who had signed the agreement with Voser for undertaking the feasibility of the project, had termed it as “a major and well defined project” that Qatar has put on fast track.” The beauty of the project, according to him, was that it would bring in a new product which is completely different from traditional ones.

“This critical petrochemicals project fits well with Qatar’s strategy to strengthen and further diversify its growing chemicals industry and represents an important milestone on our journey to become a significant petrochemicals producer,” al-Sada said.

The mono-ethylene glycol would be produced using Shell’s proprietary OMEGA (Only MEG Advanced) technology and linear olefins using SHOP (Shell Higher Olefin Process).

Mono-ethylene glycol is an important raw material for industrial applications. A primary use of it is in the manufacture of polyester resins, films and fibres. In addition, it is important in the production of antifreezes, coolants, aircraft anti-icer and deicers and solvents.

Al-Sada said the petrochemicals complex would provide Qatar with another viable option to extract optimal value from its natural gas resources.

“This agreement marks the beginning of another partnership with Qatar Petroleum for the development of a world-scale extra-ordinary petrochemical project in Qatar,” Voser said.

Both Qatar Petroleum and Shell have delivered Pearl Gas-to-Liquids and Qatargas 4 this year; two of the world’s largest projects built in Ras Laffan Industrial City.

Source: Daily "Gulf Times", Doha; 5 Dec 2011

(Syed Rashid Ali, Karachi, Pakistan)