INTERVIEW: Lucite in talks for Saudi MMA jv

15 May 2007 07:19  [Source: ICIS news]

By John Richardson

SINGAPORE (ICIS news)--Lucite International is negotiating to build a joint venture 250,000 tonne/year methyl methacrylate (MMA) plant at Al-Jubail in Saudi Arabia for start-up in 2011, Neil Sayers, a vice president with the UK-based company, said on Tuesday.

“We have signed a memorandum of understanding with Sipchem, the privately owned Saudi company, and will make a decision on whether or not proceed in the fourth quarter of this year,” added Sayers, who has responsibility for Europe and technology.

The company had said in October that it planned to build in the Middle East but did not disclose the location or potential partner then.

Sayers stressed that other locations remained on the table, with elsewhere in the Middle East and Asia under study.

Qatar has been ruled out because Lucite, as medium-sized company, wouldn’t have had the muscle in a country dominated by big investments to secure the right kind of conditions.

Saudi Arabia, however, is eager to attract differentiated downstream investment away from basic petrochemicals. The Sipchem project, which will be centred on a 1.2m tonnes/year cracker, also includes acetic production.

“This could be an ideal fit for us because we would be able to offtake ethylene feedstock from the cracker, carbon monoxide from the acetic plant and the other feedstock we need, which is methanol.  Sipchem is also planning a methanol facility,” said Ian Lambert, Lucite’s chief executive officer.

The Saudi project would be the second to employ Lucite’s Alpha technology. Lucite claims that the process delivers a 30% cost saving over the conventional hydrogen cyanide (HCN) route to MMA.

The first plant to employ Alpha is under construction at Jurong Island in Singapore and is on schedule for 100% commercial production by end-2008,” Sayers added. “Commissioning will begin in the second quarter of that year with the first commercial production in the second half,” he said.

The 120,000 tonne/year Singapore plant uses existing catalyst technology. New catalysts are being developed to enable Lucite to raise capacity to the 250,000 tonnes/year planned for the second unit.

Sayers added that there are plans for an Alpha 3 unit, for start-up in 2014, which would have a capacity of 350,000 tonnes/year. The location could be in the Middle East, China or Singapore.

Lucite also has an existing 100,000 tonnes/year plant at Caojing, near Shanghai, which uses the HCN route to MMA. Its capacity is due to be raised to 150,000 tonnes/year in the next three years.

Alpha 4 could also be built with a capacity bigger than 350,000 tonnes/year for start-up in 2017.

But Lambert was keen to stress that all these plans were subject to revision based on market conditions.

He added that global demand growth has been 5% for MMA while the China market had been growing at 20% per year.

“We think there will be a downturn in 2010 when global operating rates dip to the low 90% level from the current 95%. After that the market will be recover.”

Operating rates were in the high 80% region during the last downcycle in 2001-02, he added.

By: John Richardson
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