Domestic

Qatar, CNOOC to build $5.8b petrochem plant in Hainan

(China Daily/Agencies)
Updated: 2009-11-20 08:08

Qatar Petroleum International, a unit of the emirate's state-run oil company, plans to build two petrochemical plants costing about $9.8 billion in Asia by 2015 to tap demand in the world's fastest-growing region.

Qatar will partner China National Offshore Oil Corp (CNOOC) and a Chinese petrochemicals maker to construct a $5.8 billion plant in China's Hainan province, Chief Executive Officer Nasser al-Jaidah said in an interview in Tokyo. Another project in Vietnam will cost as much as $4 billion and both ventures will use Qatari liquefied petroleum gas to produce chemicals, he said.

"There is huge potential for growth in Asia, especially China," al-Jaidah said. "We can hit two birds with one stone - tap the markets and exit our product," he said, without disclosing Qatar's share of investment in the venture.

The Middle Eastern country is investing in Asia as it seeks new markets for its LPG output that may double to 12 million metric tons by 2010. Qatar Petroleum International last week agreed to buy stakes in Royal Dutch Shell Plc's two petrochemical ventures in Singapore.

CNOOC agreed this month to purchase an additional 3 million tons of Qatari liquefied natural gas a year.

Asian "energy demand is probably going to grow fast, as much as Europe or the US", said Tony Regan, a consultant with Singapore-based Tri-Zen International Ltd. "They probably feel they have to have access to this rapidly growing market."

The Hainan plant will have a processing capacity of about 3.8 million tons of LPG a year and may be approved by the National Development and Reform Commission in the second half of next year, al-Jaidah said.

CNOOC spokesman Xiao Zongwei said he isn't aware of any petrochemical investment in Hainan by the Beijing-based company.

The Hainan project will be capable of producing chemicals such as polypropylene, used in tires, shoes and plastic products, al-Jaidah said.

To build the plant in Vietnam, Qatar has begun preliminary talks with Vietnam Oil & Gas Group, known as PetroVietnam, Itochu Corp and companies in Thailand that al-Jaidah didn't name.

An Itochu spokeswoman, who declined to be named because of company policy, said the Tokyo-based trading house might join the project.

Itochu Corp fell 0.5 percent to 604 yen in Tokyo yesterday. CNOOC declined 1.4 percent to HK$12.56 ($1.62) in Hong Kong.