Shell cancels $6.5 billion project in Qatar

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