UpdateSABIC to close unviable Teesside ops

16 July 2008 13:44  [Source: ICIS news]

(Updates, adds map and detail throughout)

 

By Peter Salisbury

 

LONDON (ICIS news)--SABIC Europe is to close down two UK aromatics units as they have become financially untenable, the company said on Wednesday.

 

"The economics of the units planned for closure have become unviable and have forced SABIC Europe to face up to this difficult decision," the company said in a statement.

 

Plans to streamline aromatics operations included the closure of the Aromatics 2 unit at North Tees, near Seal Sands in northeast England, and the company’s paraxylene (PX) plant at Wilton, near Redcar, by the end of 2008, it said.

 

Players in the European aromatics market expressed concern over the potential impact on regional supply, and were unclear on what products the closure would affect.

 

“We will need to reserve judgement until we have further details,” said a source at one major European benzene producer, “but this could have quite an impact.”

 

“This is bad news, no question,” said a source at a PX trader.

 

SABIC has nameplate UK production capacity of 510,000 tonnes/year of benzene, 340,000 tonne/year of toluene, 500,000 tonnes/year of mixed xylenes and 365,000 tonnes/year of  PX along with 330,000 tonnes/year of cyclohexane, according to ICIS plants and projects.

 

The company had said that its Wilton PX plant would be closed as a result of the rationalisation, but was not available for comment on the impact on other aromatics production, leaving players nervous on the potential for tightened supply.

 

The Aromatics 2 and PX plants are part of SABIC's C8 product chain which processes mixed xylenes for the polyester industry. SABIC Europe said that as a result of this review it would be exiting this area.

 

“We recognise the impact of our actions on the European market for our products,” David Hughes, SABIC business unit director for aromatics and oxygenates, had said in a press statement.

 

“We will be working with our customers and suppliers over the coming weeks and in order to allow these discussions to start, we make this announcement at this early stage,” he said.

 

“On Teesside, SABIC UK Petrochemicals remains fully committed to its olefins cracker operations at Wilton and cyclohexane production at North Tees.

 

"The current construction of the new world-scale low density polyethylene [LDPE] plant and a possible upgrading of the Aromatics 1 plant are important factors in helping to underpin this,” Hughes added.

 

($1 = €0.63)

 

For more on aromatics visit ICIS chemical intelligence
To discuss issues facing the chemical industry go to ICIS connect

BBC panorama of the Seal Sands area

 

 

By: Peter Salisbury
+44 20 8652 3214

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