AFPM '13: Proposed China MDI plant may be built in US – Huntsman

25 March 2013 23:38  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS)--Huntsman may begin searching for an alternative site in the US for a proposed methyl di-p-phenylene isocyanate (MDI) plant initially planned for China – if permits are not forthcoming, the head of Huntsman said on Monday.

China would still be an ideal site for the MDI plant since it will be close to customers, said Peter Huntsman, the company's CEO. Huntsman made his statements on the sidelines of the International Petrochemical Conference (IPC), held by the American Fuel & Petrochemical Manufacturers (AFPM).

Back in 2011, the company had discussed plans to build a 240,000 tonne/year MDI plant in Caojing.

However, the various permitting processes have been lengthy, and the company has waited two years for the proper environmental permits, Huntsman said. If there is not much permitting progress in the next few quarters, Huntsman may begin considering alternative sites.

The advent of shale gas has made a US site in Geismar, Louisiana, attractive, he said. The combination of energy savings and earnings from sales of co-product hydrochloric acid (HCl) could offset the freight costs to China, Huntsman said.

"We have alternatives and we are exploring alternatives. My preference would be to build in China," he said. However, "If I need a backup to that, we have a very viable project here."

Under the possible US alternative, Huntsman would produce the crude MDI in Louisiana, he said.

The crude MDI would be shipped to China, where it would be split. The technical centres and other supporting centres would also be in China, he said.

"I'm not ready to pull the trigger," Huntsman said. However, he is much less hesitant to consider the US than he was a year ago.

Huntsman is already investing $135m (€104m) into its existing world-scale methyl di-p-phenylene isocyanate (MDI) production facilities in Geismar, Louisiana, and Rotterdam, the Netherlands.

The AFPM conference ends on Tuesday.

Additional reporting by Jeremy Pafford

($1 = €0.77)

By: Al Greenwood
+1 713 525 2645

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