The possibility of constructing a major petrochemical plant together is being discussed by Qatar Petroleum (QP) and Royal Dutch Shell, according to Shell officials. The plant will be located in Qatar at the Ras Laffan industrial center.
Shell issued a statement outlining the possible project which would contain a plant for mono-ethylene glycol with an annual production of nearly 1.5 million tonnes, yielding finished products totaling more than 2 million tonnes.
There was no value stated for this project although the Minister of Energy in Qatar, Abdullah bin Hamad al-Attiyah, stated that initial costs were expected to be around $5.9 to $6 billion according to a report by the state media QNA. The Energy Minister was involved in the signing of the initial deal as a representative of QP.
The Minister noted that financing is not an issue. When compared with other projects in the $15 to $20 billion mark that the ministry has financed, this $6 billion plant is manageable. Attiyah’s comments were heard on CNBC Arabiya, where he mentioned the high ratings and leading position of both Shell and QP.
In the past there were discussions between Exxon Mobil Corp and Qatar surrounding this plant project.
Sources in the industry stated that it was thought Exxon Mobil pulled out of talks, but Rex Tillerson, a chief executive at the US firm, denied those rumors recently and stated to the media that Exxon was still waiting for the decision from Qatar.
Total, a French firm, was also discussing the plant project with Qatar. Neither Total nor Exxon was reached for a comment regarding the Shell announcement.
Peter Voser, a Shell chief executive, and Attiyah placed their signatures on a memorandum of understanding according to the firm.
Voser stated that this plant will take the long time experience and cutting edge technology Shell is known for and combine those with Qatar’s ambition and drive to make their natural gas resources have larger value.
The small Arab nation has had a long term target of exporting 77 million tonnes of LNG (liquefied natural gas), allowing Qatar to reach the top of LNG exporters. They recently reached that goal.
Qatar and Shell are also working on another project, namely ramping up supplies for middle distillates using the Pearl project involving GTL (gas to liquids). That is a $19 billion project.Andrew Reid, Staff Writer, Gulf Jobs Market News