QatarEnergy, one of the world’s largest LNG exporters, has decided to proceed with the $6 billion petrochemicals joint venture with US partner Chevron Phillips Chemicals near the LNG liquefaction plant at Ras Laffan.
An agreement marking the final investment decision for the project was signed in Doha by Saad Sherida Al-Kaabi, the Minister of State for Energy Affairs and who is also President and Chief Executive of QatarEnergy and Bruce Chinn, President and CEO of Chevron Phillips Chemical.
The companies created a joint venture under the agreement signed on January 8 called Ras Laffan Petrochemicals.
The deal sees QatarEnergy holding a 70 percent share and Chevron Phillips Chemical 30 percent.
“This marks QatarEnergy’s largest investment ever in Qatar’s petrochemicals sector and the first direct investment in 12 years,” explained Al-Kaabi.
“It will double our ethylene production capacity and increase our local polymer production from 2.6 to more than 4 million tons per annum and place the utmost emphasis on sustainable growth and the environment,” he added.
QatarEnergy said the Ras Laffan complex is expected to begin production in 2026, includes an ethane cracker with a capacity of 2.1 million tonnes per annum, making it the largest ethane cracker in the Middle East and one of the largest in the world.
Derivative units
The integrated complex will also include two high density polyethylene derivative units with a total production capacity of 1.7 million tonnes per annum.
Originally announced in 2019, the project highlights how Middle East oil producers are expanding further into petrochemicals, used in the production of plastics and packaging materials.
“There is no doubt that this cornerstone investment in Ras Laffan Industrial City marks an important milestone in QatarEnergy’s downstream expansion strategy,” said Al-Kaabi
“It will not only facilitate further expansion in the downstream and petrochemical sectors in Qatar, but will also reinforce our integrated position as a major global player in the upstream, LNG and downstream sectors,” he added.
As part of the joint venture Chevron Phillips Chemical will provide project management services.
The engineering, procurement and construction of the ethane cracker will be executed by a joint venture between Samsung Engineering and CTCI Corporation.
Tecnimont will execute engineering, procurement and construction for the polyethylene units.
The polyethylene units will use Chevron Phillips Chemical’s MarTech loop slurry process to produce high-density polyethylene, which will primarily be exported from Qatar.
Polyethylene is used in the production of durable goods like pipes for natural gas and water delivery and recreational products such as kayaks and coolers. It is also used in packaging applications to protect and preserve food and keep medical supplies sterile.
“At Chevron Phillips Chemical, we continue to grow our global asset base where there is access to reliable, affordable feedstock. This investment will help meet global demand for polyethylene products,” said Chinn of Chevron Phillips.
