Qatar signed a deal with Royal Dutch Shell Sunday to develop a $6.4 billion petrochemicals complex in the Ras Laffan industrial city. Qatar's Energy Minister Dr. Mohammed Bin Saleh Al Sada and Shell Chief Executive Peter Voser signed the agreement in Doha. The project includes a world-scale steam cracker, with feedstock coming from natural gas projects in Qatar; a mono-ethylene glycol plant of up to 1.5 million tons per annum using Shell's proprietary OMEGA (Only MEG Advantaged) technology; 300 kilotons per annum of linear alpha olefins using Shell's proprietary SHOP (Shell Higher Olefin Process); and another olefin derivative. The complex will produce cost-competitive petrochemicals products to be marketed primarily into Asian growth markets. Sada said: “This critical petrochemicals project fits well with Qatar's strategy to strengthen and further diversify its growing chemicals industry and represents an important milestone on our journey to become a significant global petrochemicals producer… this large petrochemicals complex will provide Qatar with another viable option to extract optimal value from its natural gas resources.” “We estimate the cost to be $6.4 billion but at this stage one should be cautious,” Sada said. Asked whether the agreement replaced a similar one signed with US group Exxon Mobil, Sada said: “No, this is not a replacement. This is a continuation of our strategy. There will be other petrochemical plants in the pipeline.” While industry sources said last year they believed Exxon had pulled out of the agreement, chief executive Rex Tillerson denied that and told reporters the company was waiting for Qatar to make its decision. The plant agreed with Shell will have the capacity to produce 1.5 million of mono-ethylene glycol per year and 300,000 tons of linear alpha olefin, mostly for export to Asian markets, an official statement said. State-run Qatar Petroleum will have an 80 percent equity interest in the project and Shell will hold the remaining 20 percent. Peter Voser added: “This agreement marks the beginning of another partnership with Qatar Petroleum for the development of a world-scale petrochemicals project in Qatar. Coming on the heels of the inauguration of Pearl GTL, this new venture demonstrates the commitment of both parties to deepen our relationship even further. Shell values the opportunity to bring to Qatar the expertise and technology necessary to deliver a petrochemicals project of this scale and looks forward to its successful delivery.” Qatar is the world's largest exporter of liquefied natural gas (LNG), gas chilled for export by ship.
