The announcement of a major downstream project has been the highlight of a busy period for Qatar’s hydrocarbons sector. An agreement, signed on December 4 between Saleh Al Sada, the minister of energy and industry, and Shell’s CEO, Peter Voser, lays out the commercial principles and scope of a proposed petrochemicals complex in Ras Laffan Industrial City in northeast Qatar.
The large development, which has undergone a pre-feasibility study, would include a steam cracker supplied with Qatari natural gas as a feedstock and a plant producing up to 1.5m annual tonnes of mono-ethylene glycol, used in manufacturing products such as polyester, coolants and aerospace de-icers. The complex would also produce 300 kilotonnes of linear alpha olefins (LAO), which are used in the manufacture of polyethylene and lubricants, and other olefin derivatives.
The project will be co-owned by state hydrocarbons firm Qatar Petroleum, with an 80% equity stake, and Shell, with 20%. The export-oriented complex particularly targets petrochemicals sales in fast-growing Asian markets.
Al Sada said at the signing that the deal “represents an important milestone on our journey to become a significant global petrochemicals producer” and that the plants would help Qatar “extract optimal value from its natural gas resources”. Qatar has proven natural gas reserves of 25.3tn cu metres (13.5% of the global total) and is the leading world producer, with 116.7bn cu metres in 2010, according to energy firm BP.
The country is working to increase the value it gains from its resource wealth by using the raw materials to produce secondary and tertiary products, including petrochemicals. This goes hand-in-hand with efforts to develop oil extraction, including secondary recovery – using water or steam to push oil to the surface when its natural pressure no long suffices.
Qatar increased its oil production by 13.5% in 2010 to 1.57m barrels per day (bpd), as output at existing fields rose, and secondary extraction will help support rising output over the medium term. In the future, enhanced oil recovery, which can be used in fields where geological factors and oil density make extraction more problematic, is likely to help even more.
The country’s prominence on the international energy stage was highlighted when Qatar became the first country in the Middle East to host the World Petroleum Congress (WPC), one of the world’s leading oil and gas forums, held every three years. The WPC, held between December 4 and 8, was organised by the World Petroleum Council, which has more than 60 member countries that account for 95% of global oil and gas production. (Importing countries are also included.) The Congress addressed all aspects of the hydrocarbons industry, from technology to social, economic and environmental impacts.
Several thousand delegates from around the world took part, including government officials and major oil and gas company representatives. Qatar was also able to use the opportunity to sign several important hydrocarbons deals, including one with UK-based Centrica on gas and oil development.
While petrochemicals developments is seen as central to building value in the energy sector, Qatar is also cementing its position as the world’s largest liquefied natural gas producer. The country’s capacity hit a milestone in the middle of 2011 when it reached 77m tonnes per annum.
Investments by the likes of Shell are indicative of private sector opportunities in developing the sector’s downstream hydrocarbons capacity.
“Downstream activities offer a large potential for growth in Qatar, as Qatar can rely on strong competitive advantages, notably its production of ethane and condensates,” Stephane Michel, the managing director of Total E&P Qatar, told OBG. “Exporting facilities will have to be upgraded to sustain this growth.”
Michel said research and development (R&D) is also of increasing importance and he sees this as an opportunity for Qatar, suggesting the country could play a leading role in R&D internationally.
“Qatar is very well positioned to become a hub for R&D in the energy field,” he said. “The availability of large investors and high-quality facilities attracts professionals to this field. In addition, strong global partners and a young population locally and in the region offer a suitable platform for success in the field of R&D.”
Qatar is already a world leader in gas production. It is now taking the necessary steps, in partnership with international investors, to expand downstream capacity and ensure its hydrocarbons sector as a whole.
Stay updated on how some of the world’s most promising markets are being affected by the Covid-19 pandemic, and what actions governments and private businesses are taking to mitigate challenges and ensure their long-term growth story continues.
Register now and also receive a complimentary 2-month licence to the OBG Research Terminal.
Register Here×La production marocaine de phosphates et de produits dérivés, comme les engrais, devrait connaître une hausse considérable. En effet, l’Office Chérifien des Phosphates (OCP), qui détient le...
The Turkish Prime Minister Bulent Ecevit has spent the last week in the US hoping to garner support for economic reforms at home and trade concessions for Turkish exports to the US.
