The energy giant Royal Dutch Shell announced on Wednesday that it will not proceed with the $6.5 billion Al Karaana petrochemicals project in Qatar due to high capital costs.
'The decision came after a careful and thorough evaluation, which showed high capital costs rendering it commercially unfeasible, particularly in the current economic climate prevailing in the energy industry,' said the company in a statement on its website.
Shell joined the project with a 20 percent interest share in the joint venture with state-owned Qatar Petroleum, who had a 80 percent stake.
The project began in Dec. 2011 to build a petrochemicals complex in the Ras Laffan industrial city in northern Qatar.
The engineering design of the project was completed in March 2014, and was waiting for a final investment decision.
Qatar is the biggest exporter of liquefied natural gas, LNG, in the world, while exporting LNG, crude oil and petroleum products constitute a high portion of Qatar's revenues, according to the U.S.' Energy Information Administration.
The state-owned petroleum company Qatar Petroleum controls all aspects of the country's upstream and downstream oil and natural gas sectors - including exploration, production, transport, storage, marketing and the sale of energy products, the U.S. agency says.
By Ovunc Kutlu
Anadolu Agency
ovunc.kutlu@aa.com.tr