Innovene wants to sign Saudi feedstock deal this year

LONDON (ICIS news)--Innovene, BP’s planned petrochemicals spin-off, wants to sign a binding agreement on feedstock supplies for its proposed joint venture ethylene complex in Saudi Arabia by the end of this year and commission the facility by 2009, BP said on Tuesday.

Innovene also said it is seeking low-cost feedstock links in North Africa to lift its competitive position.

BP’s initial Securities and Exchange (SC) filing for the planned Innovene IPO (initial public offering) outlines Innovene’s strategic goals in Saudi Arabia and in Africa and the Middle East.

Innovene’s strategy is to build “one or more petrochemical complexes through joint ventures in the regions with access to low-cost feedstock, including the Middle East and North Africa”, according to the S-1 filing, the precursor to an IPO offer document. Collaborations are sought with local partners and governments, it added.

On 8 June Innovene signed a non-binding memorandum of understanding (MoU) with the Delta Group to build a cracker and derivatives complex in Saudi Arabia. The planned ethylene capacity from the complex is 1.2m tonne/year, with high density polyethylene (hdPE) and linear low density polyethylene (lldPE) downstream units.

There were indications that the privately held Saudi Arabia-based Delta group was keen to develop a second complex focused more on propylene production and polypropylene (PP) and acrylonitrile (ACN) downstream plants.

Prior to the signing of the MoU, a deal giving Innovene access to low-cost feedstock either out of the Middle East or North Africa was seen as a key strategic step for the company, which currently lacks such links.

< previous article(ICIS Podcast: Chemical News Central 2 November 2009)

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