Sector News

Qatar Petroleum partners with CPChem for world-scale petchem complex

June 25, 2019
Chemical Value Chain

Qatar Petroleum (QP) says it will partner with Chevron Phillips Chemical (CPChem) to develop, build, and operate a major petrochemical complex at Ras Laffan, Qatar. The facility will include an ethane cracker with nameplate capacity for 1.9 million metric tons/year (MMt/y) of ethylene.

It will be the largest ethane cracker in the Middle East and one of the largest in the world, says QP. The facility will also include two high-density polyethylene (HDPE) units with a combined capacity of 1.68 MMt/y, adds the company.

The petchem complex will raise Qatar’s PE production capacity by 82% when it starts scheduled operations in the fourth quarter of 2025. The engineering design phase is due to start shortly, say the companies. Ethane feedstock will come mainly from Qatar’s offshore North Field.

The announcement was made during a ceremony in Doha, Qatar, where project agreements were signed by Saad Sherida al-Kaabi, the country’s minister of energy and president and CEO of QP, and Mark Lashier, president and CEO at CPChem.

A new joint venture (JV) will govern the project, with QP to own 70% and the remaining 30% to be owned by CPChem. No estimated development cost for the project has been given.

CPChem says it will license its MarTECH loop slurry process for manufacturing HDPE, and provide project management, engineering, and construction services. “As part of the development phase, the companies will study the potential efficiencies that could be realized by harnessing the existing capabilities of The Qatar Chemical Company (Q-Chem) joint ventures to provide overall operational management of the facility once complete,” adds CPChem.

The conclusion of the agreements “constitutes an important milestone for Qatar Petroleum as petrochemicals represent a major pillar of our growth strategy,” says Kaabi. “This project will optimize the utilization 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,” he adds.

Developing the petchems project was “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,” says Lashier. The project fits with CPChem’s strategy to build petrochemical assets in regions where there are abundant and competitively-priced feedstock options, he adds.

QP invited companies in May 2018 to submit proposals to be its partner after reviving plans for the petchem complex, with Shell widely expected to be one of the front runners. QP has been trying to expand its petrochemical operations for several years. In 2014, it cancelled the Al-Sejeel project, which had been planned as a JV between itself and Qatar Petrochemical Co. at Ras Laffan, and in 2015 it shelved the Al-Karaana petrochemical project—which had been proposed as a JV between QP and Shell—owing to high investment costs and the collapse in the price of oil.

Qatar currently produces about 2.3 MMt/y of PE, which is set to rise to approximately 4.3 MMt/y once the new plant is on-line.

CPChem is a 50/50 JV between Phillips 66 and Chevron. Q-Chem and Q-Chem II are existing JVs operating at Mesaieed, Qatar, in which CPChem holds 49%.

By Mark Thomas

Source: Chemweek

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