Bloomberg: Shell May Build Chemical Plant in Qatar, Energy Minister Says: "The Anglo-Dutch company is counting on Qatar to help recover proven reserves, which it said in January had been overstated for years." (ShellNews.net)

Sept. 26 (Bloomberg) -- Royal Dutch/Shell Group agreed to consider building a chemical plant in Qatar that would help convert the nation's natural gas reserves, the world's third- largest, into raw materials used in plastics, the Gulf state's energy minister said.

Shell, in partnership with Qatar Petroleum, is studying the feasibility of building a processing plant to take ethane out of gas produced from Qatar's North field, the world's largest, and produce ethylene, used in an array of products from antifreeze to solvents, said Abdullah bin Hamad al-Attiyah in Abu Dhabi.

``We are talking to them about building a big petrochemical plant,'' al-Attiyah told reporters. ``It's a natural progression as the ethane will be supplied as a by product from the gas-to- liquids plant they are building'' in Qatar, he said. The Gulf state aims to develop a petrochemical industry that may rival Saudi Arabia, the region's largest chemical producer, he said.

Shell, Europe's second-largest oil company, agreed last year to spend $5 billion on a project in Qatar to convert gas into diesel and other fuels, which is almost 10 times bigger than any other such plant now existing.

Nobody was immediately available for comment at the Shell global press office in London.

Proven Reserves

The Anglo-Dutch company is counting on Qatar to help recover proven reserves, which it said in January had been overstated for years. The Securities and Exchange Commission has the strictest definition of what can be included in an oil company's accounts.

The Qatari oil minister said he had no objection to Shell including in its accounts the 1.7 billion cubic feet of natural gas per day that the emirate has guaranteed to the European company for the 25-year life of the GTL project.

``If they want to book it, it's their business how they define it,'' al-Attiyah said.

The SEC defines proven oil and gas reserves as those that can be produced ``with reasonable certainty.'' For example, the SEC requires signed sales contracts, approved authorizations for spending, environmental permits and other documents.

Shell has said it's looking to the U.S. regulators to decide whether the natural gas reserves can be included.

To contact the reporter on this story:

Sean Evers in the Dubai bureau at evers@bloomberg.net.

To contact the editor responsible for this story:

Tim Coulter at tcoulter@bloomberg.net.

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