QP and Shell change strategy for $6.4bn petrochemicals project

27 June 2012

Partners looking to appoint contractor to integrate front-end engineering and design for Ras Laffan olefins project

The joint venture partners behind the $6.4bn Ras Laffan olefins project have changed the strategy for the front-end engineering and design (feed) packages on the project.

State-owned Qatar Petroleum (QP) and the UK/Dutch Shell Group are still tendering the feed for the five main feed packages. However, they are also looking to appoint a feed integrator to divide the five packages into two and combine the completed feeds.

“The contract for a feed integrator has been sent out and the market is saying that it will probably go to an engineering contractor that does not have a conflict of interest,” says a contracting source familiar with the project. “I am hearing that [the US’] Fluor is the frontrunner, but it could easily go to a similar company like [Australia’s] WorleyParsons or [the US’] Jacobs Engineering.”

The first package contains:

  • Offsites and utilities
  • Steam cracker

The mixed-feed steam cracker unit with the feedstock being ethane and propane. 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 second package will contain the three packages that will use Shell’s technology. This package includes:

  • Linear alpha olefins (LAO) unit
  • Monoethylene glycol (MEG) unit
  • Oxo-alcohols unit

The MEG unit will have a capacity of 1.5 million t/y and will use Shell technology. The scope of works 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.

Sources indicate that the reason for the change in strategy is that Shell are now playing a more active role in the scheme and that both partners believe this is the most cost effective method.

The implications of the change regarding the engineering, procurement and construction (EPC) contracts is that they will now be released slightly later than first planned.

“All of the packages should be released for tender in the third quarter of 2013,” says the source. “This is a few months later than the original plan.”  
MEED reported in April that the original plan was to release the EPC packages in tranches across 2012 and 2013. RBS is the financial adviser for the scheme.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.