US Sunoco pays Braskem $130m for interrupting propylene supplies

14 August 2012 21:31  [Source: ICIS news]

HOUSTON (ICIS)--US-based Sunoco paid Braskem $130m (€105m) because of the early termination of a propylene supply agreement, the Brazil-based producer said on Tuesday.

Sunoco's Marcus Hook refinery in Pennsylvania had supplied 55% of the propylene used by Braskem's nearby polypropylene (PP) plant, Braskem said.

In December, Sunoco announced it was shutting down the main units at the Marcus Hook refinery.

Because the shutdown interrupted propylene supplies, Sunoco paid Braskem a total of $130m during the first half of the year, the company said.

To prevent any future propylene disruptions at its 350,000 tonne/year PP plant, Braskem has since bought the propylene splitter at the Marcus Hook refinery.

Braskem expects to spend $56m to acquire the splitter, to carve out the assets and to improve its operations, the company said. Out of that total, $15m is coming from a government grant.

Braskem acquired the Marcus Hook PP plant as well as two other PP plants from Sunoco in 2010.

Sunoco did not immediately respond to a request for comment.

($1 = €0.81)

By: Al Greenwood
+1 713 525 2645

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