Qatar Petroleum has selected US-based Chevron Phillips Chemical Company as its partner for the Middle East’s largest ethane cracker, which will be set up at the Ras Laffan Industrial City for a planned start-up in 2025.
The new multi-billion dollar joint venture world scale petrochemical complex will have an ethane cracker with a nameplate capacity of 1.9mn tonnes of ethylene per year, making it one of the largest in the world.
The joint venture will be the biggest facility in the entire Middle East for processing ethane -- or “cracking” it, in industry parlance -- into ethylene.
It will also include two high-density polyethylene derivative units, which will raise Qatar’s current polyethylene production capacity by 82% by the fourth quarter of 2025, HE the Minister of State for Energy Affairs, Saad Sherida al-Kaabi, also the president and CEO of Qatar Petroleum, said at a press conference at the Ritz Carlton Doha on Monday.
Qatar’s polyethylene production will rise to 4,300 tons a year when the plant is completed in 2025, from 2,300 tons currently, al-Kaabi said.
The venture will cost billions of dollars “though a more precise estimate must await the completion of engineering studies,” al-Kaabi said.
He revealed Qatar Petroleum had raised the production target from an initial plan for 1.6mn tons a year.
The multi-billion dollar joint venture world scale petrochemical
complex will have an ethane cracker with a nameplate capacity
of 1.9mn tonnes of ethylene per year, and planned for a 2025 start-up
“We saw better results than expected from the North Field, and we were able to have more ethane available for extraction, which can be used as the feedstock. So, QP increased the venture’s ethylene target. We like them big in Qatar,” al-Kaabi said.
The project will be built to the highest standards, deploying state of the art technologies and placing utmost importance on safety, reliability and the environment.
The ethane cracker complex will provide excellent opportunities for Qatar’s private sector to contribute to the development of the country’s energy sector, and will generate significant revenues that will support the further development of national economy.
The agreements to set up the petrochemical complex were made during a ceremony at the Ritz Carlton. The relevant project agreements were signed by al-Kaabi and by Mark E. Lashier, president & CEO of Chevron Phillips Chemical.
The ceremony was attended by senior Qatar Petroleum, Chevron Corporation, Phillips 66, and Chevron Phillips Chemical Company executives.
The signed agreements govern the project’s ownership and development through a new joint venture company between Qatar Petroleum (with a 70% participating interest), and Chevron Phillips Chemical Company (with a 30% participating interest).
The Woodlands, Texas-based Chevron Phillips Chemical Company, equally owned indirectly by Chevron Corporation and Phillips 66, is one of the world’s top producers of olefins and polyolefins and a leading supplier of aromatics, alpha olefins, styrenics, specialty chemicals, plastic piping and polymer resins.
Al-Kaabi said, “The conclusion of these agreements constitutes an important milestone for Qatar Petroleum as petrochemicals represent a major pillar of our growth strategy to achieve our vision of becoming one of the best national oil and gas companies in the world.”
Al-Kaabi added: “This project will optimise the utilisation of ethane produced from the North Field LNG expansion project as well as from existing ethane producing projects. It will also consolidate Qatar’s position among the world’s leading petrochemicals producers, and complement our efforts to further expand our footprint in the global petrochemicals markets.
“This major project will provide excellent opportunities for Qatar’s private sector to contribute to the development of our oil and gas sector, and will generate significant revenues that will support the further development of our economy and the well-being of all people living in Qatar.”
The minister concluded his remarks by expressing gratitude to HH the Amir Sheikh Tamim bin Hamad al-Thani, for his guidance and unwavering support of the energy sector.
He also expressed thanks to Qatar Petroleum’s executives and staff for their dedication and commitment, and to all the companies that submitted offers for this project.
On his part, Lashier said, “Developing the Ras Laffan Petrochemicals Project is a tremendous opportunity for our company to expand on our highly-successful joint ventures with the State of Qatar to meet the growing global demand for petrochemical products that enrich lives around the world. We look forward to building on our strong relationship with Qatar Petroleum and believe that these new world-scale assets will deliver exceptional value.”
The engineering design of the Ras Laffan petrochemicals project “should commence shortly, leading to a planned start-up in late 2025”, Qatar Petroleum said in a statement.
Petrochemicals are the building blocks of the society and are used extensively from sports shoes to computer keyboards. They are created when oil and natural gas molecules are split, or cracked, to produce
ethylene, propylene and other chemicals.
Ethylene is used to make polyethylene, the most commonly used plastic.
Energy producers view these compounds increasingly as crucial to unlocking more profit from each barrel of crude they pump, and demand for these chemicals is growing faster than for oil and gas, a Bloomberg dispatch said.