Sector News

Shell to return to Qatar as partner in world-scale petchems JV

May 1, 2019
Chemical Value Chain

Shell is expected to partner Qatar Petroleum in the recently revived petrochemical project at Ras Laffan, according to Energy Intelligence publication, citing people with knowledge of the situation. The news confirms CW’s recent report following a discussion with Graham van’t Hoff, executive vice president Shell Chemicals, who said that the company may return as a partner in the project. A Shell Chemicals’ spokesman declined to comment on the latest report.

Shell was formerly a partner with Qatar Petroleum in the multi-billion dollar Al-Karaana petrochemical project at Ras Laffan, but this was shelved in 2015 because of high investment costs and the collapse in the oil price. Qatar Petroleum has since revived plans for the complex and in May 2018 invited international companies to submit proposals for partnering with it.

The new complex will include an ethane cracker with capacity for more than 1.6 million metric tons/year (MMt/y) of ethylene, making it the largest ethane cracker in the Middle East, and one of the largest in the world, Qatar Petroleum says. It will also include world-scale derivatives plants, which will consolidate Qatar’s position among the leading petrochemical producers. Start-up is scheduled for 2025. Qatar recently said that it would allow foreign companies to hold up to 49% in joint ventures in the energy sector, up from the current 20%.

Shell’s return to Qatar as a petchems JV partner would partially offset its withdrawal from Saudi Arabia. The two Arab countries are at loggerheads, with the Saudis leading a coalition of Islamic countries that have broken diplomatic relations and instituted a virtual economic blockade of Qatar for what they claim – which Qatar denies – is its support for terrorism.

In 2017, Sabic bought Shell out of Saudi Petrochemical Co. (Sadaf) for $820 million, terminating a long-term agreement that had been due to expire in 2020, and last month Saudi Aramco announced that it would acquire the 50% it does not own in the two companies’ Sasref refinery joint venture for $631 million.

The Ras Laffan petchems project will be Shell’s first ethylene cracker in the Middle East following its withdrawal from Sadaf. The company’s total ethylene capacity, including its share of offtake rights, rose by 10.6% to 6.5 MMt/y last year. This included 2.53 MMt/y in Asia, 2.27 MMt/y in the Americas, and 1.7 MMt/y in Europe.

Shell is already a major investor in Qatar. It has a 100% ownership in Pearl GTL, a fully-integrated gas-to-liquids facility with a capacity to produce, process and transport 1.6 billion standard cubic feet per day (scf/d) of gas from Qatar’s North Field. The Pearl complex has an installed capacity of about 140 thousand boe/d of liquid hydrocarbon products and 120 thousand boe/d of natural gas liquids (NGL) and ethane. Shell also has a 30% interest in Qatargas 4, which operates integrated facilities to produce about 1.4 billion scf/d of gas from Qatar’s North Field, an onshore gas-processing facility and one LNG train with a collective production capacity of 7.8 MMt/y of LNG and 70 thousand boe/d of condensate and NGL.

By Natasha Alperowicz

Source: Chemical Week

comments closed

Related News

May 15, 2022

New York’s EPR and packaging reduction bills lauded as game-changers in plastic pollution battle

Chemical Value Chain

The US State of New York is introducing two new bills to combat over-packaging, poor recycling rates and litter issues, including an Extended Producer Responsibility (EPR) program requiring companies such as McDonald’s and Amazon to pay for the cost of packaging disposal and recycling.

May 15, 2022

Borealis and Reclay launch entity focused on lightweight packaging 

Chemical Value Chain

The new organization’s mission is to redesign the critical steps of the plastics sorting and recycling system for post-consumer lightweight packaging (LWP) to speed up circularity, born from a need to meet the rising market demand for high-quality recyclates for use in high-end plastic applications.

May 15, 2022

Starbucks and Hubbub launch reusable packaging fund as COVID-19 diminishes consumer appetite

Chemical Value Chain

Starbucks and Hubbub have launched a £1 million (US$1.22 million) “Bring It Back Fund” to increase the uptake of reusable packaging in the F&B industry. The funding will go toward innovative ideas that make it easier for customers to use alternatives to single-use packaging by supporting pilot projects that help shift consumption habits.