QChem II, Qatar


With the world's thirst for chemicals and materials derived from crude oil, the Gulf states are a hotbed of construction activity increasing their production capacity.

One such project, which opened in November 2010, is the Q-Chem II project. The project, started in 2005, is an expansion of the Q-Chem complex that was launched in May 1997 in Mesaieed Industrial City (MIC) to produce a range of petrochemicals, including sulphur (36,000mtpa), ethylene (500,000mtpa), 1-hexene (47,000mtpa) and high density polyethylenes (453,000mtpa).

The new Q-Chem II is located on an adjacent site and came on-stream in 2010. The Q-Chem II project increases the overall Mesaieed site output capacity by about 140%.

Owners / operators

The two companies involved in the Q-Chem II venture are Qatar Petroleum (QP) (previously the Qatar General Petroleum Company) and Chevron Phillips Chemical Company (Chevron Phillips Chemical). The Q-Chem II project was mediated by Qatar Chemical Company II (Q-Chem II), which is a joint venture set up between Qatar Petroleum (51%) and Chevron Phillips Chemical International Qatar Holdings (49%). This company is a wholly owned subsidiary of Chevron Phillips Chemical.

Q-Chem II

The Q-Chem II Project includes a new 350,000mtpa high-density polyethylene plant and a 345,000mtpa normal alpha olefins plant. Both of the new plants uses Chevron Phillips Chemical's proprietary loop slurry technologies for their production.

Another aspect of the Q-Chem II project is a joint venture (Ras Laffan Olefins Company Ltd) which developed a 1.3m mtpa ethylene cracker in the Ras Laffan Industrial City. The first phase of the RLOC was started-up in March 2010. The second phase will see capacity increased to 1.6m mtpa, making it one of the largest in the world.

The Q-Chem II companies have a 53.31% capacity share of the ethylene cracker. The additional capacity of the ethylene cracker is owned by Qatofin, which is a venture between Qatar Petroleum (1%), Qatar Petrochemical Company (QAPCO) (63%) (Qatar Petroleum owns 56% of QAPCO), and Total Petrochemicals (36%).

"The Q-Chem II companies have a 53.31% capacity share of the ethylene cracker."

The new ethylene cracker is able to provide feedstock via a new 120km-long pipeline to the Q-Chem II complex and to Qatofin's 450,000mtpa linear-low-density polyethylene unit (llDPE).

The latter uses Unipol's technology licensed from Univation and is also situated in MIC. Any further excess of ethylene feedstock will be passed to the Qatar Vinyl Company in MIC.

The Q-Chem II units, the ethylene cracker, and the Qatofin unit came online in 2010.

Finance

The $1.3bn finance for the Q-Chem II project and its related share of the Ras Laffan ethylene cracker was provided by the Export-Import Bank of the United States, a group of international commercial banks and equity capital from Chevron Phillips Chemical and Qatar Petroleum.

Construction

The engineering, procurement, and construction (EPC) contract for the Q-Chem II project was awarded to a consortium of TECNIMONT and Daewoo Engineering & Construction Co., in 2005. Flexcrete provided a special concrete coating for the plants.

The construction (EPC) of the ethylene cracker was carried out by Technip of France. Construction was started in June 2006. Punj Lloyd of India won the $45m contract to construct the pipeline in April 2007 and this was completed in April 2008.