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Thu 25 Nov 2010 06:21 PM

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Total in talks with Qatar over petchem project

French energy company linked with Ras Laffan project, claims ExxonMobil pullout

Total in talks with Qatar over petchem project
EARLY STAGE: Total has entered into the early stages of tallks with Qatar over the building of a petrochemical plant in Ras Laffan

France's Total has entered talks with Qatar to build a petrochemical plant in the gas rich Arab country, a spokesman for Total said on Thursday.

The talks are related to a petrochemical complex that Qatar is planning to build in Ras Laffan, where it has also been working with ExxonMobil. The project was initially valued at $6 billion.

"We are in discussions with Qatar about the project," a Total spokesman said. "But they are still in a very early stage."

Two industry sources have said that Exxon Mobil has pulled out of the Ras Laffan project. But the company has denied the reports and repeated its statement from August when it said it was still working with Qatar.

But Total Petrochemicals' senior vice president for Asia and the Middle East, Graeme Burnett, was quoted as saying in ICIS news that Exxon Mobil, Total's US rival, has exited the project.

"ExxonMobil has exited the cracker project in Qatar, and we've always told media that we are interested in doing another project in Qatar," he was quoted as saying in the article published on Wednesday.

Total's spokesman in Belgium said Burnett's comments reflected the company's position and said he would not comment on the issue further.

But Philippe Guys, Qatar group representative for Total, told Reuters: "We effectively already proposed the project, before it was awarded to Exxon. It's just a matter of reviving it, if the Qataris choose to do so."

The proposed complex in Ras Laffan includes a 1.6 million tonnes per year (tpy) steam cracker and associated units including two 650 tpy polyethylene plants and a 700 tpy ethylene glycol facility.

Qatar is the world's largest producer of liquefied natural gas (LNG) and Exxon is the second largest foreign investor in the Gulf Arab state after Royal Dutch Shell.

Exxon, heavily involved in large liquefied natural gas projects in Qatar, is a 10 percent shareholder in the Ras Laffan refinery which is operated by Qatar Petroleum.

If Exxon does pull out of the project, it will be the third time a US company has pulled out of an energy project in the Gulf region this year.

In April, US oil firm ConocoPhillips abandoned a refinery project in Saudi Arabia and a $10 billion Shah sour gas development in the UAE.

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