Shell, Qatar to study Ras Laffan petchem plant

DUBAI (BestGrowthStock) – Royal Dutch Shell (RDSa.L: ) and Qatar Petroleum (QP) (QATPE.UL: ) will jointly study building a major petrochemicals plant in the Ras Laffan industrial city in Qatar, Shell said on Tuesday.

“The scope under consideration would include a mono-ethylene glycol plant of up to 1.5 million tones per annum … to yield over 2 million tones of finished products,” Shell said in a statement.

it did not give a value for the project but Qatar’s Energy Minister Abdullah bin Hamad al-Attiyah, who signed an initial deal on behalf of QP, said the initial cost of the project was estimated at $5.9-$6 billion, state news agency QNA reported.

“As to financing, there is no problem … $6 billion is not much compared to … projects of $20 billion or $15 billion which we have financed,” Attiyah said in remarks aired on CNBC Arabiya television. “QP and Shell are top brands which enjoy the highest ratings.” Exxon Mobil Corp (XOM.N: ) had been in talks with the Gulf Arab state to build the plant.

Industry sources said they believed the U.S. company had pulled out, but chief executive Rex Tillerson last week denied that and told reporters the company was waiting for Qatar to make its decision.

ExxonMobil and France’s Total (TOTF.PA: ), also in talks with Qatar on the same project, were not immediately available for comment.

The memorandum of understanding was signed by Attiyah and Peter Voser, chief executive of Shell, the company said.

“This new project will combine Shell’s experience and technology with the ambition of the State of Qatar to create further value from its natural gas resources,” Voser said.

The small Arab country has recently reached its long-term goal to export 77 million tones liquefied natural gas (LNG), making it the largest exporter in the world.

Qatar is also involved in another project with Shell, where it will ramp up supplies of middle distillates through its $19 billion Pearl gas-to-liquids (GTL) project with the company.

(Reporting by Humeyra Pamuk; editing by James Jukwey)

Shell, Qatar to study Ras Laffan petchem plant