Braskem and Pequiven consider relocating Venezuela PP project

10 March 2010 17:08  [Source: ICIS news]

LONDON (ICIS news)--Braskem and Venezuelan state-owned producer Pequiven have considered relocating their joint venture polypropylene (PP) project to Paraguana in Venezuela’s Falcon state so the project can receive propylene feedstock from the Paraguana refinery complex, the Brazilian petrochemical group’s spokesman Nelson Letaif said on Wednesday.

Letaif said this would eliminate the need to build an integrated propane dehydrogenation (PDH) plant and reduce the investment cost to about $450m (€333m). The revised project would have a minimum PP capacity of 300,000 tonnes/year, he added.

Braskem and Pequiven originally planned, via their Propilsur joint venture, to build a PDH and PP complex with a PP capacity of 450,000 tonnes/year, in Jose in Anzoategui state.

Letaif told ICIS that the difference between the proposed new project in Paraguana and the original project in Jose, “is that it would not be necessary to also build a PDH plant, which would cut the investment from about $1bn for the previous project to about $450m.”

Braskem and Pequiven have been studying the feasibility of the Paraguana project in cooperation with Venezuela’s state-owned energy group PDVSA, which would supply the feedstock.

“One of the basic questions is to discover exactly the current availability of propylene in Paraguana,” Letaif said.

“If the studies indicate that the project is feasible, start-up would begin in 2013,” he said.

However Letaif added that the Jose PP project would not be scrapped, but would remain on “stand-by” and could be implemented at a future date.

Jorge Buhler, director of US-based Polyolefins Consulting, said he was impressed that Braskem and Pequiven were seeking to cut their investment costs by simplifying the PP project. The lower cost would ease the search for project financing, which he said appeared problematic.

Another possible advantage was that the project could be implemented faster in Paraguana than in Jose because there was already a propylene surplus in Paraguana, he added.

Braskem and Pequiven’s other joint venture project, a polyethylene (PE) complex in Jose, remained delayed. Braskem said the companies have agreed to postpone all developments relating to the project for one year so they could evaluate competitive alternatives.

Letaif confirmed that Jose was still the location of the PE project, which would produce 1.3m tonnes/year of ethylene and 1.1m tonnes/year of PE.

($1 = €0.74)

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By: Anna Jagger
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