DOHA Higher oil prices and growing signs of Asian economic recovery have encouraged gas-rich Qatar to revive dormant industrial projects and seek more foreign investment in the downstream sector, officials said on Tuesday.
They said the projects, which have been brought back onto drawing boards, include a condensate refinery, a large methanol project, a gas-to-liquid (GTL) conversion plant to produce middle distillates and a toluene diisocyanate (TDI) project.
"These projects alone are estimated to cost up to $3 billion.
But besides them, there are other gas-based projects, like an aluminum smelter, in which Qatar General Petroleum Corporation (QGPC) may or not take part, are under study," said an official.
Preliminary deals for the condensate refinery, methanol, GTL and TDI projects had been signed in 1997 and 1998 with foreign partners. But progress was blocked by an oil price collapse and economic woes in Asia, the principal market for Qatari energy products.
"Benign oil prices today mean smoother financing and the Asian recovery means larger market," the official told Reuters.
"The signs of recovery in Asia are evident from a significant jump in the profits of Qatar Petrochemical Company (QAPCO)," he said.
Early this year, QAPCO disclosed a 25.9 percent rise in its 1999 profit to $102 million from $81 million the previous year.
Currently, Qatar is going ahead with the construction of two petrochemical projects Qatar Vinyl Company and Qatar Chemical Complex with around $1.3 billion syndicated loans arranged in active cooperation with their French and U.S. partners.
Among the revived projects, the $500-million condensate refinery is to be implemented by QGPC in partnership with its foreign shareholders in Qatargas and Ras Laffan LNG Company (RASGAS).
It is designed to process 100,000 barrels a day (bpd) of condensate from gas produced at the north field.
The $1 billion methanol project is designed to produce up to three million tons a year from three production trains, to be implemented in phases. It will be 51 percent owned by QGPC and the rest by Canada's Methnex Corporation.
South Africa's Sasol has tied up with QGPC to set up the $500-700 million GTL project to produce 30,000 bpd of middle distillates.
It is also 51 percent owned by QGPC and the remainder by Sasol.
The $250 million TDI project is a joint venture of QGPC and Italy's Enichem intended to produce 100,000 tons a year of polyurethene foams from gas supplied by QGPC.
A QGPC projection, released last June, aims to increase the share of non-oil revenue to its net cash flow to 50 percent over the next five years from 30 percent at present.
(Reuter)