German ethylene pipeline start-up set for mid 2012 after court ruling

02 December 2011 16:53  [Source: ICIS news]

LONDON (ICIS)--Germany’s long-delayed 400,000 tonne/year ethylene pipeline is now expected to start up towards the middle of 2012, following a favourable court ruling last month, officials said on Friday.

The project will connect German chemical major BASF’s petrochemicals hub at Ludwigshafen in Rhineland-Palatinate with chemical sites in Bavaria.

Erwin Fellner, a spokesman for Ethylen-Pipeline Sud (EPS), told ICIS that an administrative court in Baden-Wurttemberg state had ruled against property owners who were seeking to block the pipeline.

The court’s decision allows EPS to complete the remaining 1.5km of the 370km pipeline and to begin operations, but at its own risk as there are still cases against the project pending before higher courts, Fellner said.

In Rhineland Palatinate and Bavaria the pipeline is already completed.

Klaus Thiel, an EPS spokesperson who focuses on the project’s legal troubles in Baden-Wurttemberg, said about 20 plaintiffs are still pursuing cases before an administrative court in Stuttgart and before Germany’s federal constitutional court.

The constitutional court would look at the legal basis of a Baden-Wurttemberg state law that was passed to allow certain expropriations to facilitate the project, Thiel said.

Thiel said EPS was “about 90%” sure that those cases would go in its favour, given that all court decisions so far were favourable. The consortium will therefore go ahead to complete and start the pipeline up, he added.

Meanwhile, EPS could negotiate further with the plaintiffs, who may still withdraw their cases, he added.

However, he would not rule out that “in a worst case”, EPS may be ordered to stop operating the line if the courts should rule against it.

So far, court cases and objections have delayed the project’s start-up by about four years, driving costs up to around €200m ($270m). As part of efforts to accommodate some property owners, the pipeline’s overall length had to be extended by 10km, which added to costs.

The project, which received a €45m subsidy from the Bavaria state government, was estimated to cost about €150m in 2006.

Following start-up in mid-2012, capacity would be gradually ramped up to its 400,000 tonnes/year volume, the officials said.

EPS’ stakeholders include BASF, the Netherlands-based ethylene producer LyondellBasell, Austrian polyethylene producer Borealis, Swiss speciality chemicals producer Clariant, Austrian oil and gas firm OMV, German PVC producer Vinnolit and German chemical company Wacker.

However, the line will not be reserved to those firms alone. Under the project’s “common carrier” concept, Germany’s 15.5m tonne/year MiRO refinery in Karlsruhe will be able to ship ethylene on the pipeline, thus providing a market for a chemical feedstock that would otherwise be burned in the refinery’s on-site heat generation.

The project will connect Ludwigshafen with chemical producers at sites in Munchsmunster, Gendorf and Burghausen in Bavaria, where some plants could become uncompetitive without connection to the ethylene pipeline.

($ = €0.75)

For more on BASF, LyondellBasell and other producers visit ICIS company intelligence

For more on ethylene visit ICIS chemical intelligence

By: Stefan Baumgarten
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