Qatar Targets Massive LNG and Petrochem Exports with Over $25 Billion Project Investments through 2010

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Researched by Industrialinfo.com (Industrial Information Resources Incorporated; Houston, Texas). Looking at a target of 77 million tons of LNG exported per annum by 2010, Qatar is spending $15 billion in the next five years to add seventy proposed tankers to its existing fleet. These should all be in operation by 2010.

Currently, Indonesia is the world's top exporter of LNG, with a total of 25 million tons in 2004. But Qatar is confident, and this year it has already clinched orders worth over $10 billion and is 'well committed and overbooked by 2012, in terms of LNG contracts,' according to oil minister Abdullah Al Attiyah. During May, the minister is visiting the U.S. to look at possible investments in LNG import terminals with Exxon (NYSE:XOM) (Irving, Texas) and ConocoPhillips (NYSE:COP)(Houston, Texas).

In the petrochemical sector, Qatar is aiming at a record level of production of 12 million tons per annum by 2010. Qatar Petrochemical Company (Qapco) vice chairman, Hamad Rashid al-Mohannadi, has said that $10 billion will be invested in petrochem projects through 2010. The bulk of the products would be exported and marketed worldwide. By the end of the decade, supplies of product will be coming from Qatofin, Q-Chem, and Ras Laffan ethylene cracker.

Qapco's ethylene production will be boosted when the ongoing plant debottlenecking is completed by the middle of next year. Production will then reach 720,000 tons annually. Current production stands at 525,000 tons of ethylene, 385,000 tons of lotrene, and 45,000 tons of sulfur per annum.

Technip (Paris:TEC) (France) has signed the $800 million EPC contract to build the 1.3-million-ton-per-year ethylene cracker at Ras Laffan with Qatar Petroleum, ChevronPhillips Chemical Company, Qapco, and Total Petrochemicals (NYSE:TOT). The cracker project, one of the largest in the world, will be owned by Qatar Petrochemical with Total Petrochemicals, through their Qatofin joint venture, and Qapco with ChevronPhillps (NYSE:CVX) (San Ramon, California), through their Q-Chem 11 co-owned project.

The cracker will feed the Q-Chem 11 downstream units, which will include a 350,000-ton-per-annum polyethylene plant and a 350,000-ton-per-annum normal alpha olefins plant, which will be sited next to the existing Q-Chem complex in Mesaieed. Both plants will use ChevronPhillips technology.

The $2.6 billion engineering contracts for Q-Chem and Qatofin are expected to be awarded in June and October, respectively. All three projects are scheduled to begin operations in mid-2008. Also in Mesaieed, Qatfin is constructing an $850 million, 450,000-ton polyethylene (LLDPE), unit which will start operations in 2008. When Ras Laffan and Q-Chem 11 are completed, total ethylene production in Qatar will exceed 2.6 million tons per annum.

Qatar and Total's Arkema have also agreed in principle to a $500 million project deal to double production capacity at the Qatar Vinyl Company by 2009. Al-Monhannadi also said that Qapco was in a joint study for another world-scale ethylene cracker and was looking at Ras Laffan and Mesaieed for the cracker plant, with Ras Laffan likely to get the final decision.

Qapco produces a wide range of LDPE (low density polyethylene), which is used in a wide range of manufacturing, wrapping, and industrial applications. Al-Mohannadi said that the company would open three of its own marketing offices in Taiwan, Pakistan, and Bangladesh in 2005, adding to their existing offices in India, UAE, and Syria.

"This represents a major shift in our marketing policy. We now focus more on the end users. In order to service them, we need to go to places where we have major markets," he said.

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