Qatar Petroleum (QP) has signed a landmark joint venture agreement for the new Laffan Refinery 2 (LR2) Project to further optimize its condensate processing and enhance Qatar's refining and export capacities.
The joint venture agreement for the launch of the estimated $1.5bn project was signed with Total, Idemitsu, Cosmo, Marubeni and Mitsui.
The agreement was signed by H E Dr Mohammed bin Saleh Al Sada, Minister of Energy and Industry and Chairman & Managing Director of QP, along with Patrick Pouyanne, President of Refining & Chemicals at Total SA; Yoshihisa Matsumoto, Executive Vice President and Representative Director of Idemitsu; Isao Kusakabe, Director and Senior Executive Officer of Cosmo Oil Co Ltd; Yasuyuki Fujitani, Managing Officer and Deputy COO EMEA Business & Managing Director of Mitsui Middle East; and Kazuaki Tanaka, Managing Executive Officer of Marubeni Corporation.
As per the agreement, QP will have 84 percent stake in the project. The ownership structure of the partners are as follows: Total (10 percent), Idemitsu (2 percent), Cosmo (2 percent), Marubeni (1 percent) and Mitsui (1 percent).
With a condensate processing capacity of 146,000 barrels per day, the LR2 is the second of its kind to be built in Qatar since Laffan Refinery 1 (LR1) was inaugurated in 2009. The LR1 and LR2 will be together capable of delivering 40 percent of Qatar's total condensate production. The construction of LR2 is expected to be completed in the second half of 2016, Al Sada said after the signing ceremony.
The new LR2 condensate refinery is similar to LR1, with a similar processing capacity of 146,000 barrels per day. It will be operated by Qatargas Operating Company Limited (Qatargas) and 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).
It will give Ras Laffan a total installed condensate refining capacity of about 300,000 barrels per day, making it one of the largest single facilities of its kind in the world.
The Minister said that a currently under-construction diesel hydrotreater (DHT) expected to be commissioned in the second quarter of 2014, will have enough capacity to process all the light gasoil from both LR1 and LR2 into ultra-low-sulphur diesel which meets the most stringent environmental specifications.
Patrick Pouyanne, who is also a member of Total's Executive Committee, said: "This project is a new step in the long history of partnerships between Total and Qatar throughout the full value chain, from upstream exploration activity down through the petrochemical industry. A key link in this chain is the downstream activity of the refining of Qatar's condensates, the world's largest condensate producer. Total, as a founding member of the existing Laffan Refinery, is pleased to maintain its role in this next phase of condensate refining growth in Qatar, which provides support for Qatar's National Vision 2030. This involvement throughout the value chain is an excellent example of Total's integrated strategy."
Mohammed Nasser Al Hajri, QP Director for Downstream Ventures, said: "LR2 is designed to process untreated condensate from Qatar's North Field. In addition to the LR2 condensate refinery, the configuration of the new plant includes a gantry for dispatching diesel to the local market by trucks (in operation since last year) and a diesel hydrotreater unit that will be able to process all light gasoil from LR1 and LR2. All products from the LR2 complex will be hydrotreated and its sulphur content will meet the most stringent quality specifications."
Sheikh Khalid bin Khalifa Al Thani, CEO of Qatargas and Chairman of the Executive Committee of the new joint venture company, said: "The new refinery, which is currently in the construction phase, will be built according to state-of-the-art technology with high energy efficiency and environmental protection standards. The detailed engineering work kicked off early this month, and we expect to complete and commission the project by the fourth quarter of 2016."