NewsFlashVenezuela kills $3bn olefins project

07 February 2006 21:20  [Source: ICIS news]

HOUSTON (ICIS news)--ExxonMobil said on Tuesday that the proposed $3bn (Euro2.5bn) Jose olefins project in Venezuela has been terminated.

ExxonMobil said Venezuela’s Petroquimica de Venezuela (Pequiven) told ExxonMobil Chemical that it would be unable to complete the feasibility study for the project under the terms agreed in August 2004 and had elected to terminate the project development agreement.

The 50:50 joint project was designed to make 700,000 tonne/year of polyethylene (PE) and 400,000 tonne/year of glycols at the Jose petrochemicals complex in Anzoategui state.

In December, Venezuelan energy minister Rafael Ramirez said ExxonMobil would not be allowed to proceed with the Jose project if it did not agree to accept state oil company Petroleos de Venezuela (PDVSA) as a partner in an Orinico basin heavy oil project and give PDVSA a controlling stake.

ExxonMobil said: “The engineering and marketing aspects of the [Jose] feasibility study are essentially complete. The parties were continuing to define the feedstock, financing, and commercial elements of the study.”

The US-based company said it offered significant technology and marketing enhancements to improve the Jose project’s feasibility. “If completed consistent with the agreement principles, the project would have provided globally competitive plastics to the Venezuela and world markets,” it said.

ExxonMobil added: “We have regretfully accepted Pequiven's decision and hope to continue our relationship. ExxonMobil also remains open to discuss future opportunities with Pequiven.”

By: Patrick Crow
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