Qatar looks at options for ethane after cancellation of Shell JV

LONDON (ICIS)–Qatar Petroleum (QP) is looking at the options for using available ethane feedstock in Qatar following the decision not to go ahead with the Al-Karaana petrochemicals joint venture with Shell, the holding company Industries Qatar said late on Thursday.

Shell and QP announced on Wednesday their decision not to go ahead with the $6.5bn Al-Karaana project because of rising capital costs and the impact of the plunging oil price on the energy industry.

Plans for capacity expansions in the Middle East have been put on hold in the low oil price environment, ICIS reported on Wednesday. Sources suggested that governments will need to step in with new incentives to encourage major producers to start spending again.

Industries Qatar said that a number of feasibility studies were being conducted with Qatar Petrochemical Company (QAPCO), Qatar Chemical Company (Q-Chem), and Ras Laffan Olefins Cracker Company (RLOC) “in order to develop and expand the number of petrochemical plants with beneficial returns for these companies, and to the petrochemical sector in general”.

Partners in these joint ventures include energy firms Total and Chevron Phillips Chemical Qatar.

Qatar Petroleum CEO, Saad Sherida Al-Kaabi, said that better integration should help reduce capital and operating costs for existing and new projects.