A rethink in the pipeline

14 December 1998 00:00  [Source: ICB]

Chemical pipelines are on the agenda in Europe once again. The Association of Petrochemicals Producers in Europe (APPE) says it may have to review its 1996 policy of 'avoiding direct involvement in promoting specific pipeline connection developments'.

Prompting the rethink is the prospect that the European Union may include chemical pipelines in its trans-European network programme next year, extending its scope from road and rail etc. 'It is definitely on the EU agenda,' says an APPE spokesman. Inclusion would bring benefits in terms of subsidies, as long as the pipelines were open access.

Also spurring the policy review, says APPE, are pressures to minimise surface transport: increasing transport of olefins by sea, the need for a clear view of the future, 'ensuring selection of appropriate locations for new investment', and planned olefin pipelines, 'making individual interconnected zones closer to one another'.

Of western Europe's 30m tonne-plus of olefins output, 8.6m tonne is moved over distances of 50km or more, with pipelines already accounting for 52% of this and sea shipping a further 35%. In terms of cost, pipelines are the cheapest mode. Propylene, for instance, costs just DM25/tonne to move by pipe compared with DM35/tonne by barge, DM60/tonne by rail and DM80/tonne by ship.

All this adds up to DM414m/year, indicating the advantages in competitiveness that can be gained through greater use of pipe infrastructure. The US industry, in comparison, spends just DM155m shifting its olefins from place to place; not using sea shipping saves it DM230m/year.

No wonder APPE is looking into how it might lobby that EU decision-making process more effectively.

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