Qatar Petroleum (QP) signed a Joint Venture Agreement with Total, Idemitsu, Cosmo, Marubeni and Mitsui for the new Laffan Refinery 2 (LR2) Project.

The agreement was signed by His Excellency Dr. Mohammed bin Saleh Al-Sada, Minister of Energy and Industry and Chairman & Managing Director of QP, along with Mr. Patrick Pouyanne, President of Refining & Chemicals at Total SA; Mr. Yoshihisa Matsumoto, Executive Vice President and Representative Director of Idemitsu; Mr. Isao Kusakabe, Director and Senior Executive Officer of Cosmo Oil Co. Ltd; Mr. Yasuyuki Fujitani, Managing Officer and Deputy COO EMEA Business & Managing Director of Mitsui Middle East; and Mr. Kazuaki Tanaka, Managing Executive Officer of Marubeni Corporation.

Under the agreement, the LR2 ownership structure will be composed of QP (84%), Total (10%), Idemitsu (2%), Cosmo (2%), Marubeni (1%) and Mitsui (1%).

The new LR2 condensate refinery is similar to the first Laffan Refinery (LR1), which started operations in September 2009, 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).

The project’s total cost is estimated at USD 1.5 billion, and its construction is expected to be completed in the second half of 2016.

Speaking at the signing ceremony, His Excellency Dr. Mohammed bin Saleh Al-Sada, Minister of Energy and Industry and Chairman & Managing Director of QP, said “The Laffan Refinery 2 Project comes in line with Qatar’s drive to monetize its resources and expand its industrial base for the benefit of its people under the visionary leadership of His Highness the Emir, Sheikh Hamad bin Khalifa Al-Thani.” He added that “the new joint venture will pave the way for further optimizing our condensate processing, creating new opportunities, and enhancing our refining and export capacities.”

H.E. Dr. Al-Sada added that “the construction of the new refinery will give Ras Laffan a total installed condensate refining capacity of about 300,000 barrels per day, making it one of the largest single site facilities of its kind in the world.” He also stressed 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.

Mr. 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 the State of 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.”

Mr. Mohammed Nasser Al-Hajri, QP Director for Downstream Ventures, gave more details about the project. “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,” he said.

Sheikh Khalid bin Khalifa Al-Thani, Chief Executive Officer 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.”

Speaking on behalf of Idemitsu, Mr. Yoshihisa Matsumoto, Executive Vice President and Representative Director of Idemitsu, said: “We are delighted to be associated with the development of this new project in Qatar. We share the strategic vision to produce and supply premium quality products to the market and LR2 is the right step in this direction.”