12 July 2010 18:03 [Source: ICIS news]
The project, which centres on a 1.6m tonne/year gas cracker, was scheduled to start up in 2015 but delays in the award of engineering contracts and a possible change in partner for Qatar Petroleum could push the start-up date until 2016, said an industry source familiar with the project.
ExxonMobil “has been looking at options for some time,” said Graham Hoar, Bahrain-based ?xml:namespace>
“The gas is not as cheap as you might think and the economics are not as attractive as you might expect,” Hoar added.
He dismissed suggestions that
ExxonMobil would not be the first company to exit a petrochemicals project in
Qatar Petroleum and ExxonMobil have delayed the awarding of engineering contracts for their proposed project. Contracts for the front-end engineering and design (FEED) and project management consultancy (PMC) were expected to be awarded this year, but are now not expected to be awarded until next year, said the industry source. This would push the start-up date for the project to 2016, he added.
Engineering companies that had pre-qualified to bid for the contracts had expected to receive a formal invitation to bid (ITB) in May, but have now been informed that the ITB will not be released before the autumn, he explained. No reasons have been given for the delay in the release of the ITB, he added.
ExxonMobil would only say that it was continuing to work on the project. “We signed a heads of agreement with Qatar Petroleum in January 2010 to progress the joint development of a world-scale petrochemical complex and we continue to work with Qatar Petroleum on the project,” a company spokesman said in a written statement to ICIS.
Qatar Petroleum said in January that the project would include a 1.6m tonne/year steam cracker, two 650,000 gas phase polyethylene (PE) plants and a 700,000 tonne/year ethylene glycol (EG) plant. The project would use feedstock from gas development projects in
A further threat to the Ras Laffan project is
“It’s possible that the economics do work but that ExxonMobil is fed up with waiting for the moratorium to be lifted,” he said. “But, fundamentally, the gas is there. So I would think that, if the economics stacked up, that ExxonMobil would say we’ll wait a couple more years and do it then.”
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