April and May saw several active weeks for Qatar’s petrochemicals sector. Barely two weeks after South Korea’s Honam Petrochemical pulled out of a joint venture with Qatar Petroleum (QP), France’s Total inaugurated its olefins cracker at Ras Laffan in northern Qatar.
While many engineering firms in the industry attended the ceremony, others were busy preparing for Qatar’s next step into the petrochemicals world. QP, the state-owned company begins the prequalification process for its planned venture with the US’ ExxonMobil this year; the $6bn scheme is likely to be the only petrochemicals project to move in Qatar in the near future.
The two companies plan to build a world-scale complex that will include a 1.6-million tonne a year (t/y) steam cracker, the largest of its kind in the world and downstream units. They have enjoyed a mutually profitable relationship so far, with ExxonMobil involved in almost 80 per cent of the emirates gas-related projects. The Ras Laffan olefins complex will see the oil major diversify downstream in Qatar.
This makes sense. With future liquefied natural gas (LNG) projects off the agenda until Doha lifts its moratorium on the giant North field, this will be an opportunity for QP to open up new markets.
QP is finally getting the ball rolling on its major gas related projects. After waiting more than a year for raw material prices to fall, the long awaited Barzan gas development scheme is now moving ahead. Building on its vast upstream resources, developed over the last decade, Qatar’s industrialisation programe may be tempered by global over capacity for the polymers it hopes to produce.
But when operational in 2015, global demand is expected to have rebounded. The plant will have the world’s largest non-associated gas field at its feet and is likely to enjoy an unrivaled feedstock advantage over Asian, European and US rivals. Even new Saudi producers may turn green with envy.