Tuesday, Feb 14, 2012

(This story was originally published Monday.)

--Qatar to build a new $5.5 billion petchem complex

--Ethylene, polyethylene products sold to emerging markets

--Qatar to more than double annual petrochemical production by 2020 to 23 millions tons

By Alex Delmar-Morgan

Of ZAWYA DOW JONES

DOHA (Zawya Dow Jones)--Qatar will build a $5.5 billion petrochemical plant in the northern industrial city of Ras Laffan by 2018, as the Gulf state steps up investment to utilize its huge gas reserves.

State-controlled Qatar Petroleum and Qatar Petrochemical Co, or QAPCO, signed a heads of agreement Monday to build a multi-billion dollar ethane and butane cracker that will produce 1.4 million tons per year of ethylene which, along with other products such as polyethylene, will be marketed abroad, Qatar's oil minister Mohammed bin Saleh Al Sada told reporters Monday.

"The complex will produce cost-competitive petrochemicals products and these would be marketed in high-growth and emerging markets, primarily in the Asia, Africa and Latin America," he said. Feedstock will come from natural gas plants in Ras Laffan, Al Sada added.

Qatar, the world's largest exporter of liquefied natural gas, is looking to diversify state revenues beyond oil and gas sales by expanding its petrochemical sector to exploit its gas reserves--the third largest in the world.

The Arab Gulf state intends to more than double its annual petrochemical production by 2020, increasing output to 23 million tons from a current level of 9.3 million tons.

Ethane is a component of gas used to make ethylene, a commonly produced petrochemical. QP has an 80% stake in the project, while QAPCO holds the other 20%.

In December Qatar Petroleum and Royal Dutch Shell PLC (RDSA.LN) agreed to build a separate large-scale petrochemical project in Ras Laffan capable of producing 1.5 million tons per year of mono-ethylene glycol.

-By Alex Delmar-Morgan, Dow Jones Newswires; +974 6659 9818; alex.delmar-morgan@dowjones.com

Copyright (c) 2011 Dow Jones & Co.

(END) Dow Jones Newswires

14-02-12 0316GMT