Braskem and Pequiven detail $3.5bn investments

14 December 2007 00:12  [Source: ICIS news]

HOUSTON (ICIS news)--Brazil’s Braskem and Venezuela’s Pequiven on Thursday fleshed out previously announced plans to invest $3.5bn (€2.4bn) together in the Jose Petrochemical Complex in Venezuela by announcing two new companies.

Prolipropileno del Sur (Propilsur) will build a 450,000 tonnes/year polypropylene (PP) plant to start up in the second half of 2010. The plant will be integrated into a propane dehydrogenation unit, providing the project with greater integration and operational flexibility. The total investment in the project is estimated at about $900m.

Polietilenos de America (Polimerica) will build a natural gas-fed cracker with capacity of 1.3 m tonnes/year. The cracker will be combined with the production of 1.1m tonnes/year of polyethylene (PE), which will be produced in three industrial plants - high density polyethylene (HDPE), low density polyethylene (LDPE) and low linear density polyethylene (LLDPE). The project has an estimated cost of $2.6bn and operational startup scheduled for the second half of 2012.

Based on the shareholders' agreement signed on Thursday, the companies will be equally controlled by Braskem and Pequiven.

A hired financial advisor, not named in the statement, has already started contacting multilateral organisations, export credit agencies, development banks and private banks to structure the financing for 70% of the total investment through project finance and the remaining 30% through transfers in equal proportions by the partners.

($1.00 = €0.68)

By: John Waggoner
+1 713 525 2653

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