16 February 2008 00:22 [Source: ICIS news]
By Jasmina Kelemen
CARACAS (ICIS news)--Brazil's Braskem remains committed to its goal of rivalling the Middle East with a strategic partnership in Venezuela, president and CEO Jose Carlos Grubisich said on Friday.
"This will be the most competitive petrochemical project of the ?xml:namespace>
Braskem's partnership with state-run Petroleos de Venezuela (PDVSA) subisidiary Pequiven will spur development of regional transformers in a second wave once Venezuela's ethane feedstock supplies can be tapped for the petrochemical industry.
In addition to its $3.2bn (€2.2bn) Jose Petrochemical Complex project to develop world class polypropylene (PP) and polyethylene (PE) production in partnership with Pequiven, Braskem will supply ethylene for chlorine, caustic soda and polyvinyl chloride (PVC) production, he said.
The abrupt departure of Exxon Mobil and Conoco in the midst of President Hugo Chavez’s nationalisation drive had fueled speculation from some observers that Braskem might also pull out. Not so, Grubisich said.
“We've been very creative and flexible to accommodate the ambitions of both companies,” Grubisich said by telephone from his office in Sao Paulo, Brazil.
Both companies agreed to take a 49% stake in the joint venture with another private partner holding the remaining 2% stake. “It's the same as a 50-50 joint venture.”
Grubisich declined to name the partner, saying only that it would operate as an exporter and would not influence strategic decisions between the principal shareholders. The shareholder would be “something like a trading company”, he said.
However, another natural market for the project will be transformers in Central America and potentially
Ultimately, Braskem's ability to compete with low-cost Middle Eastern suppliers for the lucrative
Grubisich said that with most suppliers moving to the Middle East,
"That was the base of our discussions for our supply agreements with Pequiven and PDVSA, that we will have the same kind of capacity, most updated technology and the raw materials we need to compete with the big guys in the
Grubisich also believes that the project's success will provide a reference for others hoping to cooperate on projects in
Braskem continues to evaluate other possibilities in South America, but none of the other discussions are as advanced.
Grubisich confirmed press talk that Braskem is evaluating the possibility of building a PE plant in
“We think we can have enough feedstock to build a very competitive project in
Also on the radar is a petrochemical plant in
To build a viable project in the landlocked nation, Braskem would need at least 30 million cubic meters a day of natural gas for 20 years.
"We keep looking, we keep discussing, but we're not there yet."
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