Qatar, Chevron Agree to $6 Billion Petrochem Investment

Qatar, Chevron Agree to $6 Billion Petrochem Investment

/ Financial News / Monday, 09 January 2023 11:48

Qatar signed a $6 billion deal with Chevron Phillips Chemical to build a plant housing the biggest ethane cracker in the Middle East, converting natural gas into polyethylene and other plastics.

The Ras Laffan Petrochemicals Complex, with a capacity to produce 2.1 million metric tons of ethylene a year along with 1.7 million metric tons of polyethylene derivatives, will start operation in 2026.

According to Saad Sherida al-Kaabi, Qatar's energy minister and the CEO of QatarEnergy, the complex will have "lower waste and greenhouse gas emissions" than similar facilities around the world.

QatarEnergy has a 70% equity share in the joint venture, with Texas-based Chevron Phillips holding the other 30%.

This is QatarEnergy's largest investment to date in Qatar's petrochemicals sector and the first direct investment in 12 years.

Ras Laffan will double Qatar's ethylene production capacity and increase its polymer output from 2.6 million to more than 4 million metric tons a year. Overall, Qatar's petrochemical production capacity will rise to almost 14 million metric tons per year.

The investment "marks 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," said Kaabi.

Ethane crackers, which convert gas into ethylene, have been targeted by environmental activists for their emissions. Both ethylene and polyethylene are used in a swath of plastic products, from piping to water bottles and food packaging.

Wealthy Qatar has large reserves of natural gas, including the North Field, which contains the world's biggest deposits and stretches under the Gulf Sea into Iranian territory. This final investment decision comes less than two months after QatarEnergy and Chevron Phillips Chemical took the Final Investment Decision to execute the $8.5 billion Golden Triangle Polymers Plant on the US Gulf Coast in Texas

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