UpdateShell-QPI venture in Singapore driven by feedstock edge - Shell

11 November 2009 12:04  [Source: ICIS news]

(Recasts lead and adds updates all throughout.)

SINGAPORE (ICIS news)--Shell’s agreement to set up a new partnership with Qatar Petroleum International (QPI) from its existing  petrochemical assets in Singapore is driven by the search for a feedstock edge, an official with Shell Chemicals said on Wednesday.

“One of the critical success factors of any petrochemicals facility, whether it is in the Middle East or here in Singapore, is access to competitive feedstock,” said Ben van Beurden, executive vice-president of Shell Chemicals, in a press release.

“I’m hopeful that condensates and liquefied petroleum gas (LPG) would flow from Qatar to Singapore as a result of [Qatar Petroleum] taking an investment in these joint ventures,” said van Beurden.

Shell on Wednesday agreed to sell its 50% stake in naphtha cracker operator Petrochemical Corporation of Singapore (PCS) to a new joint venture with Qatar Petroleum – QPI and Shell Petrochemicals Singapore (Pvt) Ltd.

Shell’s 30% interest in downstream polyethylene (PE) and polypropylene (PP) maker The Polyolefin Company (Singapore) Pte Ltd (TPC) will also be transferred to the new joint venture company held with Qatar Petroleum.

Shell and Qatar Petroleum declined to comment on the cost of the deal.

The shareholdings of Sumitomo Chemical in both PCS and TPC, at 50% and 70% respectively, remain unaffected by the deal.

Senior executives at the long-established TPC have been concerned for some time about the wave of large new Middle East crackers, with their economies of scale and feedstock positions.

In Qatar, Shell and Qatar Petroleum are building the $18bn (€12.1bn) Pearl gas-to-liquids project, which is due to be finished at the end of 2010.

Shell has a cracker project in Qatar that is likely to start up only after 2012.

In China, the Anglo-Dutch major has also talked about building on its existing joint-venture cracker with CNOOC as well as a derivatives project.

($1 = €0.67)

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By: John Richardson
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