Three more to join Pilbara list

23 June 1997 00:00  [Source: ACN]

HANWHA Corp, Uhde, and Linde are the latest of several companies keen to be involved in the proposed Pilbara petrochemical complex in Western Australia. The other contenders are Dow, Formosa and ICI.

Hanwha said it is negotiating with Western Australia for a 500 000 tonne/year caustic soda and 620 000 tonne/year ethylene dichloride (EDC) investment. It has just signed a salt joint venture in Onslow (see box).

The caustic soda project is attractive because salt and electricity costs are much cheaper in Australia, Hanwha said. Ethylene for the EDC project is expected to be sourced from the Pilbara cracker.

'But the investment will also depend on the market situation and ethane feedstock,' a Hanwha official said. If the project goes ahead, he said Hanwha hopes to wholly own the investment.

Uhde and Linde both told ACN they are vying for the engineering, procurement and construction contract for the Pilbara complex. Uhde has made a proposal. It is one of the companies seeking partners to push the project, an industry source said.

However, all three companies told ACN that the Pilbara project is now up in the air. There has still been no news of the results of the ethane-availability study and the selection of a proponent for the complex. These were supposed to be announced by the end of this month. The Department of Resources Development was not available for comment.

'People are looking at possible joint ventures and financing. There's a long way to go. There is talk about producing methanol and ethylene, but no one has decided anything,' a Linde official said.

He added that US company Kaiser is looking at a liquefied petroleum gas (LPG) plant at Woodside.

Hoechst denied that it has rekindled its interest in the Pilbara project. It was initially keen on PE and PP, but this interest vanished after the Hoechst Group was restructured.

Hoechst, which researched the project some two years ago, has ruled out the project's viability and is now focusing on Singapore and Malaysia instead.

'Australia needs to be competitive. If it does not give incentives, then it is unlikely that people will invest. Several companies are now doing a lot of fact-finding; the existing conditions are not favourable enough,' said Jens Mohr, managing director of Hoechst in Australia (ACN 23 June p4).

Dow, which expects to make a decision on the petrochemical project by year-end, has said costs of resources should be internationally competitive to render the project viable. It expects the cracker to start up after 2000 (ACN 19 May, p31).

Dow is looking at a US$1.2bn consortium investment with potential partners, said to be Japanese and Australian companies. Mitsubishi Chemical is known to be eyeing ethylene glycol in Western Australia.

Formosa said it needs raw materials for its No6 cracker and refinery in Taiwan.

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