Qatar Petroleum, Chevron Phillips Chemical declare financing secured for Q-Chem II project

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Qatar Petroleum and Chevron Phillips Chemical Company LLC (Chevron Phillips Chemical) announced on Wednesday that project approvals have been obtained and financial closing occurred for the Q-Chem II Project.  The Q-Chem II Project includes ownership of a new 350,000 metric-ton-per-year (770 million-pound-per-year) polyethylene plant and a 345,000 metric-ton-per-year (760 million-pound-per-year) normal alpha olefins plant to be built on a site adjacent to the existing Q-Chem I complex in Mesaieed, Qatar.  Both new plants in the Q-Chem II complex will utilize Chevron Phillips Chemical’s proprietary technologies for the production of polyethylene and normal alpha olefins.

Additionally, the Q-Chem II Project includes a joint venture to develop a 1.3 million metric-ton-per-year (2.9 billion-pound-per-year) ethylene cracker in Ras Laffan Industrial City.  Q-Chem II will have 53.85 percent capacity share of the ethylene cracker.  The remaining capacity share of the ethylene cracker will be owned by Qatofin, a venture between Qatar Petroleum, Qatar Petrochemical Company Ltd, and Total Petrochemicals.  The ethylene cracker will provide feedstock via pipeline to the Q-Chem II complex and Qatofin’s new 450,000 metric-ton-per-year (972 million-pound-per-year) linear-low-density polyethylene unit, also in Mesaieed. Start up of the Q-Chem II units, the ethylene cracker, and Qatofin’s unit is slated for late 2008.

“Qatar Petroleum’s strategy is to upgrade the value of hydrocarbon chain with Qatar gas reserves and to achieve economic diversification through development of ethane based derivative products,“ said H.E. Abdullah Bin Hamad Al-Attiyah, Second Deputy Premier, Minister of Energy and Industry, Qatar Petroleum Chairman of the Board and Managing Director.

“Chevron Phillips Chemical values our relationships with the State of Qatar and Qatar Petroleum and looks forward to the continued success of our strategic ventures in the region,” said Jim Gallogly, President and CEO of Chevron Phillips Chemical.  “The Q-Chem II Project will create a world class facility that will serve customers in the Middle East, Asia, Europe, and other regions.”

The financing for Q-Chem II and its share of the ethylene cracker will be provided by a group of commercial banks and the Export-Import Bank of the United States along with equity capital from Chevron Phillips Chemical and Qatar Petroleum.

The engineering, procurement, and construction contract for the Q-Chem II complex was awarded to TECNIMONT S.p.A. and Daewoo Engineering & Construction Co., Ltd.  Technip France was selected for the engineering, procurement, and construction of the ethylene cracker.

Chevron Phillips Chemical and Qatar Petroleum will execute the Q-Chem II Project through Qatar Chemical Company II Ltd. (Q-Chem II), a joint venture between Qatar Petroleum (51 percent) and Chevron Phillips Chemical International Qatar Holdings LLC (49 percent), a wholly-owned subsidiary of Chevron Phillips Chemical.