20 March 2014 15:49 [Source: ICIS news]
Interview story by Joseph Chang
SAO PAULO, Brazil (ICIS)--The planned Ascent project in West Virginia, US - to be built by Brazil’s industrial conglomerate Odebrecht and operated by Braskem – could be on the scale of the Ethylene XXI project in Mexico, the chief executive of Braskem said on Thursday.
“The Ethylene XXI project in Mexico could be a good indicator of the scale of Ascent,” said Carlos Fadigas, CEO of Braskem, in an interview with ICIS at Braskem headquarters.
“Ascent will be focused on PE [polyethylene] and we want flexibility of production grades,” he added.
Mexico’s Ethylene XXI project, 75:25 joint venture between Braskem and Grupo Idesa, involves a 1.05m tonne/year cracker, two high density PE (HDPE) plants with capacities of 350,000 tonnes/year and 400,000 tonnes/year, as well as one 300,000 tonne/year low density PE (LDPE) plant.
The Ethylene XXI project is 60-62% complete and scheduled to start up in the third quarter of 2015, Fadigas said.
The Ascent (Appalachian Shale Cracker Enterprise) project is part of Braskem’s strategy to use more gas-based feedstocks and extend its PE reach to the US. The company currently has five polypropylene (PP) plants in the US but no PE production.
All Braskem’s PE production of around 3m tonnes/year is in Brazil.
“We have a PP plant in West Virginia, and a technical center in Pittsburgh. We have seen the development of shale gas all around us in Pennsylvania and want to take part,” said Fadigas.
Braskem has a “creative agreement” with Odebrecht, which is a major shareholder in Braskem, said the CEO.
“Odebrecht will carry the asset and debt, but we want the petrochemical risk – the profit associated with the asset,” Fadigas said.
The arrangement is similar to Braskem’s deal with US midstream company Enterprise Products, which is building a 750,000 tonne/year propane dehydrogenation plant (PDH) plant in Texas by 2015, he noted.
“There we will be buying the propylene at producer economics. Enterprise wants to make sure its investment has a fixed income profile. They will transfer all the petrochemical risk to us,” said Fadigas.
Braskem will buy around half the propylene output of the PDH plant, which will supply about half the demand from its three PP plants in Texas, he added.
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