InterviewEthane shortage slows Shell's Qatar petchem plans

11 December 2009 08:07  [Source: ICIS news]

By John Richardson

SINGAPORE (ICIS news)--An ethane shortage is slowing Shell Chemicals' ambitions for building at least one cracker complex in Qatar, Ben van Beurden, executive vice-president of the company said on Friday.

“Ideally, we’d like to build two crackers and two OMEGA process plants on the scale of this one here in Singapore, but at the moment there is simply not enough ethane,” he added.

“There are only so many allocations of ethane available from Qatar at the moment and plenty of interested parties.”

Van Beurden was speaking on the sidelines of the official opening of Shell’s 750,000 tonne//year OMEGA process MEG plant at Singapore’s Jurong Island, which came on-stream last month.

Shell, ExxonMobil and Honam Petrochemical are three foreign companies known to be pursuing cracker projects in Qatar as joint ventures with Qatar Petroleum.

Both the Shell project – said to be delayed beyond 2015 – and that of ExxonMobil would run 100% on gas, whereas Homan’s proposed plant would be mixed liquids and gas feed.

Qatar recently extended a moratorium on development of all types of new gas-fed industrial projects from 2012 to 2014 in order to further study the reservoir behaviour of its North Field gas reserves, an industry source earlier told ICIS news.

Van Beurden also said that using naphtha from the Pearl Gas-to-Liquids (GTL) project in Qatar wasn’t a viable economic alternative as feedstock for a Shell cracker complex in the country.

“The numbers don’t work compared to the economics of gas cracking, and to the alternative value from shipping the naphtha to where the demand is strong – for example, to Asia.”

The Pearl GTL project - a joint venture between Qatar Petroleum and Shell – will produce high-paraffinic naphtha, along with gasoil, base oils, kerosene and normal paraffin.

Mechanical completion is due in Q4 next year with production ramp-up expected to take place from late 2010 into 2011, according to a Shell statement.

Last month, Shell further cemented its relationship with Qatar when it sold some its shares in cracker operator Petrochemical Corp of Singapore (PCS) and polyolefin producer The Polyolefin Co (Singapore) PTE Ltd to Qatar Petroleum.

“We have a long relationship with Qatar and this was one of several options we have been pursuing with them, both in Qatar itself and overseas.

“We are continuing to look at a cracker project on the eastern seaboard of China with Qatar Petroleum.”

Shell, PetroChina and Qatar Petroleum announced in August that they were planning to build a refinery and petrochemical complex in Zheijiang province.

Please visit the complete ICIS plants and projects database
For more information on ethane, visit ICIS chemical intelligence
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Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: John Richardson
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