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QP and QAPCO align bidders on Qatar Ras Laffan Petrochemicals

Maire Tecnimont achieves FEED work on Al-Sejeel

2B1st_Project_Smart_Explorer_Sales_Pursuit_ToolAfter awarding Al-Sejeel front end engineering and design (FEED) work to Maire Tecnimont, the national companies Qatar Petroleum (QP) and Qatar Petrochemical Company (QAPCO) are aligning the engineering companies willing to bid for the engineering, procurement and construction (EPC) contract for the Al-Sejeel petrochemical project in Ras Laffan Industrial City of Qatar.

QP-QAPCO_Al-Sejeel_Ras-Laffan-Industrial-City_MapQatar, as the other countries in the Gulf, does not want to rely only on exporting natural resources and is implementing a strategy to diversify its economy on downstream activities.

While Qatar ranks in the third position for the proved natural gas reserves in 2014, with 885 trillion cubic feet (tcf), behind Russia (1,888 tcf) and Iran (1,193 tcf), Qatar stands as the world largest exporter of liquefied natural gas (LNG) since 2006.

With a global demand for natural gas booming all over the world in beginning with the neighboring countries in the Gulf, Qatar established a long standing market leadership on the gas market, up to investing in LNG Terminals in USA in the years 2000s.

But the development of the shale gas in USA and the numbers of LNG projects under development in Australia, Canada, Russia, Africa are questioning the sustainability of the current economical model in Qatar.

Qatar Al-Sejeel and Al-Karaana projects in progress

In order to reduce its exposure to depressing gas prices in the consumers markets such as Europe and Asia, Qatar is gearing up the development of its petrochemical industry.

From 2013 to 2020, Qatar is planning to invest $25 billion capital expenditure in the downstream sector.

QP_QAPCO_Qatar_Al-Sejeel_Petrochemical_ProjectQatar Government set the target to increase the volume of production of the petrochemical sector from 9 million tonnes per year (t/y) in 2013 to 23 million t/y by 2020.

As the spearhead of this strategic evolution, Qatar Petroleum  is leading two major projects, Al-Karaana in joint venture with Shell, and Al-Sejeel in partnership with QAPCO.

The local champion QAPCO is itself a 80/20 joint venture between QP and the French major company Total.

In the Al-Sejeel project QP and QAPCO share the working interests in such a way that:

 – QP 80% is the operator

 – QAPCO 20%

In giving such leading role to QP in this downstream project, Qatar is trying to optimize the benefits of the integrated upstreamdownstream business model deployed in USA from the shale gas fed petrochemical industry.

The advantage of this integrated upstreamdownstream business model is to preserve the consolidated margins along the value chain regardless the price of the natural gas on the market.

Four consortia in competition for QP Al-Sejeel EPC

After awarding in 2013 the Al-Sejeel front end engineering and design (FEED) contract to the Italian engineering company Maire Tecnimont and the project management consultancy (PMC) contract to the California-based Bechtel, QP and QAPCO are receiving the first technical offers for theengineering, procurement and construction (EPC) contract.

QP_QAPCO_Al-Sejeel_Ras-Laffan_Petrochemical_ProjectFour consortia are in competition for this Al-Sejeel Petrochemical Complex to include:

 – 1.4 million t/y ethylene

 – 850,000 t/y of high density polyethylene (HDPE)

 – 430,000 t/y of linear low density polyethylene (LLDPE)

 – 760,000 t/y of polypropylene (PP)

 – 83,000 t/y of butadiene

In respect with the on going progress of the call for tender, QP and QAPCO expect to award the EPC contract of the Al-Sejeel Petrochemical complex on early 2015 in order to come on stream by 2018.

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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