Shell, Qatar Petroleum sign con­tract for $6b petro­chem­i­cal project

The Pak Banker - - Company & Boss News -

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

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