Japan-Taiwan JV bags $1.5bn Laffan Refinery 2 Project

A  joint venture of Japan-based Chiyoda Corporation and Taiwanese CTCI Corporation has been awarded the contract for the Engineering, Procurement, Supply, Construction and Commissioning (EPSCC) of the $1.5bn Laffan Refinery 2 (LR 2) Project.

The EPSCC contract for the second condensate refinery at Ras Laffan Industrial City was formally signed by HE the Minister of Energy and Industry Dr Mohamed bin Saleh al-Sada, Chiyoda Corporation chairman Takashi Kubota and CTCI chairman and CEO John T Yu here yesterday.  

Qatargas chief executive officer Sheikh Khalid bin Khalifa al-Thani was among those present at the signing ceremony held here yesterday.

Similar to the existing Laffan Refinery (LR1), which started production in September 2009; LR2 will have a processing capacity of 146,000 barrels per stream a day and will also be operated by Qatargas.

To be constructed adjacent to the existing refinery, LR2 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 (LPG).

Laffan Refinery 2 is expected to be fully operational by the third quarter of 2016.

Al-Sada hailed the agreement as “an important part of a vigorous drive to expand and diversify Qatar’s industrial base”.

He said: “The agreement is in line with the vision of HH the Emir, Sheikh Hamad bin Khalifa al-Thani to ensure the optimal utilisation of our country’s natural resources while contributing effectively to securing energy supplies for the local and international markets.”

Sheikh Khalid said: “The second phase of Laffan Refinery while improving product distribution domestically will also help meet the increasing demand of international customers for cleaner fuel products. Qatargas will manage the EPSCC activities and eventually operate the facilities on behalf of the shareholders, utilising the synergies available in Laffan Refinery 1, which has been in operation since 2009.

“I would like to thank Laffan Refinery 2 Company for their trust in Qatargas’ proven capabilities in executing major projects safely, with the highest quality standards, and within the approved cost and schedule. We look forward to working with the Chiyoda-CTCI joint venture to execute the project flawlessly.”

Salman Ashkanani, Refinery Ventures chief operating officer said,  “The new expansion project will double the existing capacity of the Laffan Refinery to 292,000 barrels per stream day. The detailed engineering work for LR 2 kicked off early last month.

“The facility is expected to be fully operational by the third quarter of 2016, playing a central role in Qatar’s new energy mix. Environmental issues will be given the highest priority throughout the project execution. LR2 is designed to meet the most stringent international environmental standards.”

Kubota said:  “It is truly an honour to have been awarded this important project. Chiyoda will execute the project in joint venture with the premier EPC company in Taiwan, CTCI Corp.

“Chiyoda Corporation, as the leader of the Chiyoda-CTCI joint venture, is fully committed to deliver the project in a timely manner and will steer it through all its phases with the highest standards of safety, environmental awareness and health.

“The Chiyoda Group, including Chiyoda Corporation and our local EPC company in Qatar, Chiyoda Almana Engineering re-affirm that we will continue to make a significant contribution to Qatar’s sustainable development.”

Yu said: “I would like to express my heartiest appreciation for the Laffan Refinery 2 Project awarded to the joint venture of Chiyoda and CTCI. We are determined to finish this project with a good safety record, quality and on schedule as we promised.

“Chiyoda and CTCI have experience of working together for more than 30 years worldwide. Chiyoda is also one of the shareholders of CTCI. In this connection, we are fully confident to complete the project smoothly under our seamless co-operation.”

The joint venture agreement for the LR2 Project was signed in April this year, with the shareholders consisting of Qatar Petroleum with 84% stake, Total (10%), Idemitsu (2%), Cosmo (2%), Marubeni (1%) and Mitsui (1%).

The LR2 Refinery will utilise the condensate produced by Qatargas, RasGas, Barzan and Al Khaleej Gas as feedstock. More than 3,500 people are expected to work on the project at the peak of construction.