By Santhosh V Perumal/Business Reporter
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Qatar is constructing a new refinery at an estimated cost of $1.5bn to produce 146,000 barrels of condensate per day to meet the growing demand from local and international markets.
The new Ras Laffan Refinery (LR2), which is similar to the first refinery (LR1), will have Qatar Petroleum (QP) as a majority stakeholder with 84% holding. The remaining will be held by Total (10%), Idemitsu and Cosmo (2% each) and Marubeni and Mitsui (1% each).
With the construction of the project, expected to be completed by the fourth quarter of 2014, Ras Laffan will have a total installed condensate refining capacity of about 300,000 barrels per day, making it one of the largest single site facilities of its kind in the world.
The new environment-friendly LR2 refinery, which will be operated by Qatargas Operating Company, will have a daily production capacity of 60,000 barrels of naphtha, 53,000 barrels of jet fuel, 24,000 barrels of gasoil and 9,000 barrels of liquefied petroleum gas.
A multipartite joint venture agreement was signed by HE the Minister of Energy and Industry Dr Mohamed bin Saleh al-Sada with Patrick Puoyanne, president of Refining and Chemicals at Total; Yoshihisa Matsumoto, executive vice president of Idemitsu; Isao Kusakabe, director and senior executive officer of Cosmo Oil; Yasuyuki Fujitani, managing director of Mitsui Middle East, and Kazuaki Tanaka, managing executive officer of Marubeni Corporation.
“The LR2 project comes in line with Qatar’s drive to monetise its resources and expand its industrial base,” al-Sada said, adding the new joint venture would pave the way for optimising condensate processing, creating new opportunities, especially in downstream industries, and enhancing refining and export capacities.
Asked to what extent the production from LR2 would be devoted to local and export markets, al-Sada said it depended on the demand dynamics. Qatar, he said, had a flexible policy.
With the commissioning of the LR2 project, it is expected 40% of the refining of condensates will take place within Qatar itself.
The new refinery will play a major role in the efforts to meet the objectives of the Qatar National Vision 2030 towards adding value to the country’s natural resources, diversifying and expanding Qatar’s product portfolio and providing clean energy for Qatar and the world, he said.
Mohamed Nasser al-Hajri, QP director for Downstream Ventures, said the new refinery was designed to process untreated condensate from Qatar’s North Field.
In addition to the condensate refinery, the new plant’s configuration includes a gantry for dispatching diesel to the local market by trucks (in operation since last year) and a diesel hydrotreater (DHT) unit.
Highlighting that the construction of DHT is expected to be commissioned in the second quarter of 2014, al-Sada, who is also QP chairman and managing director, said the DHT unit would have enough capacity to process all the light gas oil from both LR1 and LR2 into ultra-low sulphur diesel, which meets the most stringent environmental specifications.
“The new refinery, which is in the construction phase, will be built according to the state-of-the-art technology with high-energy efficiency and environmental protection standards,” Qatargas CEO Sheikh Khalid bin Khalifa al-Thani said.
Puoyanne said the project was a new step in the long history of partnership between Total and Qatar throughout the full value chain, from upstream exploration activity down through the petrochemical industry.
“A key link in this chain in the downstream activity of the refining of Qatar’s condensates, the world’s largest condensate producer,” he said.
Total pursuing renewable projects
Total sees huge potential in Qatar’s natural resources for decades to come as the global energy major aims to transform the country’s reserves into high-value products. President refining & chemicals and senior vice president of Total Patrick Pouyanné told Gulf Times in an interview that apart from investing in the oil and gas sector of Qatar, the company is also pursuing renewable projects such as solar power in the country.