Joint venture partners to look at alternative plans that could give higher yields
The partners behind the Al-Sejeel petrochemicals complex in Qatar have decided to put the $7.4bn scheme on hold.
Industries Qatar, the majority shareholder of Qatar Petrochemical Company (Qapco), which owns a 20 per cent stake in Al-Sejeel, issued a statement on the Qatari bourse that the project was on hold.
In the meantime, Qatar Petroleum (QP), which owns the remaining 80 per cent of Al-Sejeel, and Qapco will be studying options for another plant that would offer a better return on investment.
The announcement comes as a serious blow to contractors hoping to bid on the engineering, procurement and construction (EPC) contracts for the scheme, several of whom were already formulating bids.
It certainly came as a complete surprise to us, says an executive from a large EPC contractor hoping to bid. There is talk of a new project with a different scope, but no-ojne seems to know how long that is going to take.
Italys Tecnimont was carrying out the front-end engineering and design (feed) work, with the US Bechtel carrying out the project management consultancy (PMC) work.
The Al-Sejeel project was planned to be a world-scale complex producing more than 3 million tonnes a year (t/y) of chemicals when completed in 2018.
The scope included the production of 1.4 million t/y of ethylene, which would feed other units at the proposed complex. A further 850,000 t/y of high-density polyethylene (HDPE), 430,000 t/y of linear low-density polyethylene (LDPE), 760,000 t/y of polypropylene and 83,000 t/y of butadiene was planned.
MEED reported in January 2014 that the tender for the mixed-feed cracker had been released and that three consortiums were bidding. There were:
- CB&I Lummus/Daelim Industrial (US/South Korea)
- Linde/Petrofac (Germany/UK)
- Technip/CTCI (France/Taiwan)
The tenders for the final two packages, the technical units and the offsites and utilities, were expected to be released by the end of September.
The exact details of the new plant are still unclear. It is not known if the whole project will be changed or if there will be an amendment to the technical units.
We are in the dark over what the next step is, says a petrochemicals executive. We will just have to wait and see what the decision is after the study has been completed.
QP and Industries Qatar was not available for comment when contacted by MEED.
QPs sister project to Al-Sejeel, the $6.4bn Al-Karaana Petrochemicals Complex, is still active with bids expected to be submitted for the EPC packages in October.
MEED reported in February that the tenders had been spilt into two packages for the project, an 80:20 joint venture between of Qatar Petroleum (QP) and the UK/Dutch Shell Group which is being built at Ras Laffan in northern Qatar. They are:
Package 1: Mixed-feed steam cracker and offsites and utilities
Package 2: linear alpha olefins (LAO) unit, monoethylene glycol (MEG) unit, oxo-alcohols unit
Package 1 is open to three technology providers and they have been invited to team up with engineering, procurement and construction (EPC) contractors to bid. The consortiums left in the bidding process are:
- CB&I Lummus/Daelim Industrial/Toyo Engineering/Hyundai Engineering & Construction (US/South Korea/Japan/South Korea)
- Linde/Samsung Engineering (Germany/South Korea)
- Technip/ JGC Corporation/SK Engineering & Construction (France/Japan/South Korea)
The mixed-feed steam cracker unit will be supplied with ethane and propane feedstock. The cracker will have a capacity of 1.1 million tonnes a year (t/y) of ethylene and 170,000 t/y of propylene.
The cracker will be tendered to the technology providers on the basis that the winner will carry out the front-end engineering and design (feed), then execute the EPC in tandem with an EPC contractor.
Package 2 will concentrate on the EPC of the three process plants at the complex. The remaining bidders are:
- Chiyoda Corporation/Foster Wheeler/CTCI (Japan/US/Taiwan)
- GS E&C/Saipem (South Korea/Italy)
- Tecnicas Reunidas (Spain)
The MEG unit will have a capacity of 1.5 million t/y and will use Shell Group technology. The work involves the construction of two trains, each with a capacity of 750,000 t/y.
The LAO and oxo-alcohols units will have capacities of 300,000 t/y and 250,000 t/y respectively.
|Qatar ethylene producers|
|Name||Location||Capacity (tonnes a year)||Status|
|Qatar Chemical Company (Q-Chem)||Mesaieed||500,000||Operational|
|Qatar Petrochemical Company (Qapco)||Mesaieed||720,000||Operational|
|Ras Laffan Olefins Company (RLOC)||Ras Laffan||1,300,000||Operational|
|Al-Sejeel||Ras Laffan||1,400,000||On hold|
|Al-Karaana||Ras Laffan||1,300,000||Planned (2018)|
|Source: MEED Projects|
The US Fluor is carrying out the feed contract for the three packages using Shell Group technology, which will include the offsites and utilities works.
The submission date for the final commercial bids for both packages has now been extended to 2 October, but that may be extended. Awards are now expected towards the end of 2014 or early 2015. Commissioning of Al-Karaana is expected in 2018.
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