Qatar and Exxon partnership to end?

Although the two companies signed a deal in January to build a US$6 billion petrochemicals complex, there are industry rumours that Qatar Petroleum and Exxon Mobil Corp may be about to go their separate ways.

According to Arabian Business, Qatar Petroleum may be potentially looking for a different partner in the project, citing an official at the energy company.

The unnamed official said that Qatar Petroleum will select as a partner "the company that makes the best proposal".

The rumour was also backed up by the Middle East Economic Digest, who agreed that Qatar Petroleum was seeking new partners in the project.

Biggest single energy investment in Qatar

Comments from the two companies have been thin on the ground, with Qatari Energy Minister Abdullah bin Hamad al Attiyah declining to comment and a Exxon Mobil spokesman saying that "the company continues to work with Qatar Petroleum on the project."

It will be a big blow to Exxon Mobil if Qatar Petroleum are looking for a new partner as the project represents the biggest single energy investment in Qatar since Royal Dutch Shell announced plans in July 2006 to build its US$19 billion Pearl gas to liquids plant.

The planned petrochemical facility is (if it goes ahead) to include a 1.6 million ton a year steam cracker, two 650,000 ton polyethylene plants and a 700,000 ton ethylene glycol unit.

The massive project was due to be completed in 2015, however it has not been reported how the shake-up will affect this timetable.

The plant is part of Qatar's plans to aim its annual production of petrochemicals to 28 million tons by 2014, by making use of its rising output of natural gas, a feedstock for chemicals manufacturing.

The state is already the holder of the world's third largest gas reserves, but plans to increase its output to 23 billion cubic feet of gas a day by 2014. As such, the gas-rich country is expected to raise its LNG producing capacity from 54.3 million metric tons to 77 million by the end of the year.

Oil production will also be increased with exports rising from 798,000 barrels a day to 889,000 barrels by the end of next year. Output capacity is forecast to reach 1 million barrels a day.

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