Shell signs new petrochemicals deal with Qatar

05 December 2011

Ras Laffan complex worth $6.5bn will develop petrochemicals primarily for Asia

UK-Dutch oil major Shell has signed an agreement with Qatar setting the scope and commercial principles for the joint development of a petrochemicals complex in Ras Laffan.

The agreement, signed by Qatar’s Oil Minister Mohammad bin Saleh al-Sada and Shell chief executive officer Peter Voser at the World Petroleum Congress in Doha, follows the conclusion of a joint feasibility study conducted by state-owned Qatar Petroleum (QP) and Shell.

The partners signed an initial agreement almost a year ago, with Shell winning the race with France’s Total Petrochemicals to replace the US’ ExxonMobil, which ended its agreement with QP to develop the $6.5bn complex in June 2010 (MEED 24:12:10).

The proposed complex will include a steam cracker, a 1.5 million tonne-a-year (t/y) mono-ethylene glycol (MEG) plant, and a 300,000 t/y linear alpha olefins plant. It will also produce one other unnamed olefin derivative.

ExxonMobil had planned to build a 1.6-million t/y steam cracker, a 700,000 t/y MEG plant and two 650,000 t/y polyethylene (PE) plants by the end of 2015.

Following the signing, a tender for the front-end engineering and design (feed) work for the scheme is expected to be launched before the end of the year. The US’ Foster Wheeler is the project management consultant for the scheme.

Al-Sada confirmed the complex will use gas feedstock coming from natural gas projects in Qatar. It will produce petrochemicals to be marketed primarily into Asian growth markets. QP will hold an 80 per cent stake in the joint venture and Shell 20 per cent.

This year has already seen QP and Shell inaugurate the Pearl Gas-to-Liquids (GTL) joint venture in November, as well as start production at Qatargas 4 producing liquefied natural gas (LNG) in January.

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