Qatar, Shell Mull Six Billion Dollar Chemical Project

Qatar Petroleum and Royal Dutch Shell agreed on Tuesday to study building a petrochemical project worth six billion dollars in Ras Laffan by 2016.

The two companies signed a memorandum of understanding in the Qatari capital Doha under which they will jointly study development of the project, a statement said.

"The scope under consideration will include a monoethylene glycol plant of up to 1.5 million tons per annum," it said.

Qatari Energy Minister Abdullah al-Attiyah, who signed on behalf of state-controlled Qatar Petroleum, told reporters that the value of the project amounts to six billion dollars.

"We are talking about a six-billion-dollar (project) and we expect production to start in 2016," he said.

The small Gulf emirate, which holds the world's third-largest gas reserves, last week celebrated raising its production capacity for liquefied natural gas to 77 million tons annually, enforcing its position as the world's largest producer.