14/02/2012

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QATAR: QP and Qapco to build USD 5 billion petrochemical plant

Qatar Petroleum and Qatar Petrochemical Co. (Qapco) on 13 February 2012 signed a heads of agreement (HoA) for a 80:20 joint venture, which will produce 1.4 million tonnes per year (tpy) of ethylene, 850,000 tpy of high-density polyethylene (HDPE), 760,000 tpy of polypropylene, 430,000 tpy of linear low-density polyethylene, 125,000 tpy of pyrolysis gasoline and 83,000 tpy of butadiene.

Terming the project "strategically important” for Qatar, HE the Minister of Energy and Industry, Dr Mohamed bin Saleh al-Sada, also QP chairman and managing director, said the project would use feedstock from natural gas plants at Ras Laffan.

"We target the project completion by 2018. The petrochemical products from the plant will mainly be sold to high-growth and emerging markets in Asia, Africa and Latin America,” al-Sada told reporters at the QP headquarters yesterday.

He said the project would be jointly developed by QP and Qapco.

"Upon completion of necessary formalities, we will announce the new project name,” al-Sada said.

"This project is unique in the sense that we have a local company, Qapco, on-board the joint venture, which has QP as the majority stakeholder. For the first time, we see one of our local companies - with the support of our partners - win a major project in competition with others. It shows Qapco is mature, confident and capable enough to expand their business not only in this project but also in others as well,” al-Sada said.

Qapco is jointly owned by Industries Qatar with an 80% stake and France's Total (20%).

QP and Qapco have been working together for the past few months to plan the development of the project, which will contribute in meeting the continuously growing global demand for various petrochemical products, the minister noted.

Qapco chairman Hamad Rashid al-Mohannadi said: "This new project is a great example of implementing Qatar's long-term strategy. It is definitely a key milestone in our long journey to become a significant global petrochemicals producer from the GCC region.

"In line with the directives of HH the Emir Sheikh Hamad bin Khalifa al-Thani, the petrochemical complex will provide Qatar with the required solid foundation to extract optimal value from its abundant natural gas resources.”

He thanked al-Sada and QP for "putting trust and confidence” in Qapco and said the Mesaieed-based petrochemical major would work hard to meet the project requirements.

A joint statement by QP and Qapco said: "As Qatar continues to build upon its successes and further consolidates its position as the region's hydrocarbons hub, the new petrochemical complex is expected to serve as an important milestone in integrating the country's petrochemicals industry.”

The heads of agreement was signed for QP by al-Sada and for Qapco by al-Mohannadi. Senior executives from both the companies were present.

‘Logistical' reasons for choosing Ras Laffan

Ras Laffan has been chosen as the location for the $5.5 billion joint venture steam cracker after a detailed feasibility study, said HE the Minister of Energy & Industry, Dr Mohamed bin Saleh al-Sada. "The reasons are basically logistical and practical. Whenever we have a project plan, we look at it in detail and study from all aspects,” al-Sada told local press reporters. "Our feasibility showed Ras Laffan as the ideal location for the complex. The choice depended on synergies and logistics,” al-Sada said.

"This project is unique in the sense that we have a local company, Qapco, on-board the joint venture, which has QP as the majority stakeholder”

Source: Daily "Gulf Times", Doha; 14 Feb 2012

(Syed Rashid Ali, Karachi, Pakistan)

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