Shell, Qatar Petroleum sign contract for $6b petrochemical project
DOHA: Royal Dutch Shell Plc, the largest investor in Qatar, and state-run Qatar Petroleum agreed to "jointly study" an estimated $6 billion petrochemicals project in the Persian Gulf nation, Bloomberg reported.
The 1.5 million-metric-ton monoethylene glycol plant may be built by 2016 in the industrial city of Ras Laffan, Oil Minister Abdullah bin Hamad al-Attiyah said at the signing ceremony in Doha, the capital. Other olefin derivatives would boost the plant's output to more than 2 million tons of finished products, Shell said in a statement.
Qatar, holder of the world's third-largest gas reserves, is investing in petrochemical, aluminum and fertilizer factories as it diversifies its economy away from exporting liquefied natural gas and crude oil. The emirate aims to increase annual petrochemicals production to at least 18 million tons by 201516, al-Attiyah said.
"This new project will combine Shell's experience and technology with the ambition of the state of Qatar to create further value from its natural gas resources," Shell Chief Executive Officer Peter Voser said in the statement.
Qatar Petroleum signed an initial agreement with Exxon Mobil Corp. in January to build a petrochemical complex that would be the emirate's biggest single energy-related project since Shell's Pearl gas-to-liquids plant was announced in 2006. Qatar might choose a different partner, a Qatar Petroleum official said in August.
Al-Attiyah declined to say if Shell's project would replace Exxon's venture, and he wouldn't comment on whether Exxon would be involved in future projects in the country. Exxon's planned facility was to include a 1.6 million-ton-a-year steam cracker, two 650,000-ton polyethylene plants and a 700,000ton ethylene glycol unit, and was to be completed by 2015, Exxon and Qatar Petroleum said in January.
Qatar was in talks with Exxon, Shell and Chevron Phillips Chemical Co. as possible partners in construction of two facilities, Mohammed Yousef al-Mulla, head of Qatar Petrochemical Co., said on Dec. 13.
Total SA had designs ready for a new petrochemical complex in Qatar in the event that Exxon's project, also budgeted at $6 billion, was canceled, two people with knowledge of the matter said last month.
The plant with Shell may cost about $6 billion, though the final price is yet to be determined, al-Attiyah said.
Shell has invested about $21 billion in Qatar, the world's biggest LNG exporter. Its operations include a $19 billion gas-to-liquids plant and a 30 percent stake in the Qatargas 4 LNG project, Voser said today.
Exxon is the largest investor in Qatari plants that liquefy gas for transport by ship, with partial ownership in 12 of the country's 14 LNG plants. Exxon is also an investor in a condensate refinery. Other international oil companies invested in Qatar include Shell, ConocoPhillips and Total.
Total owns stakes in four facilities that liquefy gas and is a shareholder in Qatar Petrochemical and Qatofin Co.'s linear low-density polyethylene plant. Qatofin owns part of a new 1.3 million-ton-ayear ethane cracker.
According to Wikipedia, Qatar is OPEC's second smallest oil producer, ahead of Ecuador, though it remains an important supplier to world oil markets. In 2006, Qatar produced 1,100,000 bbl/d of total oil liquids (815,000 bbl/d was crude oil). Qatar also produced an estimated 250,000 bbl/d (40,000 m3/d) of NGLs and 35,000 bbl/d of condensate, which are exempt from the country's OPEC production quota. Qatar's proven oil reserves were 15.2 Gbbl (2.42×109 m3) as of January 2007.
In 1991, Qatar Petroleum initiated an upgrade program for oil production facilities. The program included bring- ing the Diyab structure (Dukhan) online and enhanced oil recovery (EOR), particularly at the Dukhan field. QP expects to boost capacity at Dukhan from 335,000 bbl/d (53,300 m3/d) in 2006 to 350,000 bbl/d (56,000 m3/d) in 2008. QP is carrying out similar work at several smaller fields, including the offshore Bul Hanine and Maydam Mahzam. Prospects for new discoveries are limited. QP carried out much exploration activity during the early 1980s but exploration declined as the oil glut of the mid-1980s gathered pace. Since then, QP has encouraged foreign operators to apply for exploration licenses. Although the number of wells drilled grew significantly towards the end of the 1980s, there was little success. Most new E&P is done offshore by international oil companies, including ExxonMobil, Chevron, and Total. While substantial E&P is underway, there have not been any major oil discoveries in Qatar during the last decade. Most anticipated new oil production will come from Maersk (Denmark), which operates the Al Shaheen field. Maersk reached an agreement with Qatar Petroleum in December 2005, under which the company intends to drill more than 160 production and water injection wells and establish three offshore platforms. -PB News