Qatar moves ahead with $6 billion Ras Laffan petrochemicals project

QatarEnergy announced the final investment decision with Chevron Phillips Chemical Co. to build the 2.1 million mt/year ethylene project in Ras Laffan for $6 billion, marking the company's largest investment in petrochemicals in Qatar.

Both sides agreed to establish a joint venture for the Ras Laffan petrochemicals project that will be 70% owned by QatarEnergy and 30% by Chevron Phillips, QatarEnergy said in a Jan. 8 statement after a signing ceremony in Doha.

The project also includes two polyethylene trains with a combined output capacity of 1.7 million mt/year of high-density polyethylene polymer products, raising Qatar's overall petrochemical production capacity to about 14 million mt/year, it said. Chevron Phillips is a joint venture of Chevron and Phillips 66.

QatarEnergy also announced the award of the engineering, procurement, and construction contract for the ethylene plant to SCJV, a joint venture between Samsung Engineering Co. of South Korea and CTCI of Taiwan. The EPC contract for the polyethylene plant was awarded to Maire Tecnimont of Italy while Emerson of the US was awarded the main automation contract.

First announced in 2019, the project will feature the Middle East's largest ethane cracker. Production is expected to begin in 2026, QatarEnergy said.

"This marks QatarEnergy's largest investment ever in Qatar's petrochemicals sector and the first direct investment in 12 years," Qatar's energy minister Saad al-Kaabi said in the statement. It will double the company's ethylene production capacity and increase its local polymer production from 2.6 million mt/year to more than 4 million mt/year, he said.

The go-ahead is the latest in a raft of projects planned by state-owned oil and natural gas companies in petrochemicals in the region as they seek to broaden the scope of their business.

Other projects

On Dec. 21, Abu Dhabi National Oil Co. announced plans to acquire a 24.9% stake in Austria's OMV from Abu Dhabi sovereign wealth fund Mubadala Investment Co. as the UAE's biggest energy company seeks to bolster its petrochemicals operations.

That was on the heels of a Dec. 15 announcement by Saudi Aramco and France's TotalEnergies to move ahead with the construction of a petrochemicals project called Amiral in Saudi Arabia with capacity to produce up to 1.65 million mt/year of ethylene on completion. The facility would be merged with the existing SATORP refinery in Jubail, located on the country's eastern coast, according to the plans at the time.

Qatar was one of the first countries in the region to establish a petrochemical base in the late 1960s and early 1970s, taking advantage of its vast gas resources. Less than two months ago, QatarEnergy and Chevron Phillips made the final investment decision to execute the $8.5 billion Golden Triangle polymers plant in Texas.

Kaabi noted that the Ras Laffan project is "an important milestone in QatarEnergy's downstream expansion strategy. 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."