AMSTERDAM: Royal Dutch Shell PLC and state-owned Qatar Petroleum said Tuesday they have agreed to look into a major new joint project in Ras Laffan Industrial City, Qatar. Shell said a memorandum of understanding signed by the country's energy minister includes potential production of 2 million tons per year of petrochemicals, including 1.5 million tons of mono-ethylene glycol, commonly used in antifreeze products. The project is nearly identical to one Qatar Petroleum had been exploring together with Exxon, but it was not immediately clear whether that has now been scrapped. The Exxon project was to have had a $6 billion price tag and be completed in 2015. Minister Abdulla Bin Hamad Al-Attiyah told reporters at a press conference in Doha the Shell project would cost $6 billion and be completed in 2016. A Qatar-based spokesman for Exxon, Nikolaas Baeckelmans, only provided a statement the company has been issuing for months regarding its Qatar plans when asked to comment on the Shell deal Tuesday. "As a matter of practice, we do not comment on stories, rumors or speculation," he wrote in an e-mail. "We signed a heads of agreement with Qatar Petroleum in January 2010 to progress the joint development of a world-scale petrochemical complex in Ras Laffan. Since then, we have progressed work jointly with Qatar Petroleum and are awaiting a decision to proceed." Shell and QP did not give any estimates for sales or profits for the new project under study. The pair are already cooperating in building two multibillion dollar projects in Qatar, the "Pearl" gas-to-liquids plant and Qatargas 4, a liquefied natural gas project. Tuesday's agreement was signed in Doha by Shell CEO Peter Voser and al-Attiyah. Al-Attiyah said the project would help his country expand its distribution business and diversify uses of its natural gas resources. Qatar, holder of the world's third-largest gas reserves, is investing in petrochemical, aluminum and fertilizer factories as it diversifies its economy away from exporting liquefied natural gas and crude oil. The emirate aims to increase annual petrochemicals production to at least 18 million tons by 2015- 16, Al-Attiyah said. "This new project will combine Shell's experience and technology with the ambition of the state of Qatar to create further value from its natural gas resources," Shell Chief Executive Officer Peter Voser said. Qatar Petroleum signed an initial agreement with Exxon in January to build a petrochemical complex that would be the emirate's biggest single energy-related project since Shell's Pearl gas-to-liquids plant was announced in 2006.
