Key decisions ahead for Shell Qatar petrochemicals

09 February 2012

New $6.5bn petrochemicals complex planned at Ras Laffan

State-owned Qatar Petroleum (QP), along with its partner UK-Dutch oil major Shell Group, is yet to make a final investment decision on its planned $6.5bn grassroot petrochemical complex at Ras Laffan in the north of Qatar.

The timing of the final investment is unclear, says Gerrit Jan Smitskamp, vice president of finance at Qatar Shell, speaking to delegates on 6 February at MEED’s Qatar Projects 2012 conference in Doha.

“QP is the major shareholder and they still have some key decisions to make on the complex’s utilities, whether they are inside or outside the fence. This has to be done before defining the scope”, says Smitskamp.

In December last year, Shell and QP signed a Heads of Agreement contract, which set out the basic scope and commercial principles for the joint development of a petrochemicals complex, which would include a steam cracker and 1.5 million tonne-a-year monoethylene glycol (MEG) plant and downstream facilities. This followed the completion of a feasibility study. An intial agreement was signed almost a year earlier.

“In our experience, when it comes to the execution phase, the better the scope is defined, the better the prospects for the project execution. So we will have to wait a while”, adds Smitskamp.

Shell previously said an investment decision was expected in 2013.

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