InterviewVersalis focused on bio-BD strategy, more projects to follow

02 August 2012 11:10  [Source: ICIS news]

By Andy Brice

Porto Torres, ItalyLONDON (ICIS)--The bio-based butadiene joint venture announced last week by Versalis may be the first of many new partnerships that form the company’s latest strategy to seek alternative routes of chemical production, the Italian major said on Thursday.

Versalis revealed on 24 July that it would build commercial plants for on-purpose production of bio-based butadiene (BD) as part of a deal with technology firm Genomatica and biodegradeable plastics producer Novamont. Versalis, formerly known as Polimeri Europa, will hold the majority interest in the project.

In an exclusive interview with ICIS, CEO Daniele Ferrari suggested that similar projects were also being considered:

“One of the key elements of our new strategy was to act on converting existing non-profitable or obsolete technologies and explore new ways to make chemicals,” said Ferrari.

Closing Porto Torres and replacing it with Matrica was the first example. It made news around the world and started to attract people who offered us a lot of projects. This butadiene joint venture is one of those but there are at least another two or three at the moment we are looking at. This is not part of the Matrica project but has been inspired by it,” he said.

This agreement brings together the core competencies of all three companies, said Ferrari. The partnership will combine Genomatica’s proprietary technologies and intellectual property for BD production, and Versalis’s catalysis process development and market applications of BD derivatives, as well as Novamont’s experience with renewable feedstocks.

Ferrari added: “We had the know-how about agriculture and supply, we knew about the construction and industrialisation of projects, but we were missing the fermentation side, which transforms the sugar into the specific chemical. Genomatica provides these competencies.

“We were very keen to hold the main share because butadiene is so strategic for our market; given that a pillar of our strategy is to become a global leader in elastomers, then obviously we want to exploit the integration where it makes sense,” he said.

Bio-based BD supply has become central to Versalis’s strategy, removing some of its dependence on the naphtha cracking processes.

BD is a key intermediate for its elastomers business but is under long-term pressure from volatile pricing and anticipated supply shortages. The combination of thriving automotive and tyre markets – particularly in the BRIC countries (Brazil, Russia, India and China) – and the trend towards gas cracking using ethane rather than naphtha-based facilities is exacerbating the situation.

BD is a raw material used to produce rubber tyres, plastics, electrical appliances, footwear, building components, and latex.

“We clearly need to support the growth with the right butadiene supply, which would come essentially from a three-step strategy,” he said.

“The first part, which is immediate, is to debottleneck or create opportunities in our existing crackers – for instance, the investment in Dunkirk that will come on stream at the end of 2014. In the medium term, we’re also supporting the dehydrogenation of butanes – which is technology that we own – and want to go down a non-petrochemical route to be completely disengaged from crackers and refineries. That’s why we’re embarking on this project; this is going to give us a completely new perspective,” he added.

Under this agreement, the new company will have the exclusivity to license the technology in regions such as Asia, Latin America and Europe.

“I would say that within the next two to three years, we are definitely going to be capable of industrialising at least part of the technology, with a plant possible within four years,” said Ferrari.

“At the moment we don’t have a precise location for any plants but obviously it has to be close to an agricultural supply chain and supply of biomass, and has to be close to the elastomers business in the future. We don’t know about the size of the plants at the moment because we need to decide on the process and technology first,” he said.

“The consequence of this JV is a complete integrated new biochemical complex. The concept we’re trying to develop is the ability to modify the enzymes or bacteria that will provide this transformation in order to produce a specific grade of chemical. In theory we have no limits as to what kind of monomers we want to produce,” added Ferrari.

“We continue to be a big player in alternative processes for creating monomers. We want to globalise our business and this will be another way of doing so. It will also be a vehicle for licensing our technology. It’s a great integration of competencies among partners,” he said.

The agreement between the three parties builds on a series of recent key events including the June 2011 formation of Matrìca, a 50:50 joint venture in bio-based chemicals production between Versalis and Novamont; the announcement that Versalis plans to heavily invest in innovation and capitalise on elastomers, and Genomatica’s successful production of pound quantities of bio-based BD last August.

Ferrari said: “We’ve been able to convince our shareholders to embark on something which is quite revolutionary for an oil company and shows further commitment from them that they believe we’ll be able to do something different with our chemical business.

“We are talking about investing tens of millions of euros over a four-year programme. The final objective is to arrive at the industrialisation of the process and to build up the first commercial scale plant with our technology,” he added.

By: Andy Brice
+44 20 8652 3214

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