Italy's petchems units face uncertain future as Porto Marghera set to close

Author: Paolo Scafetta

2021/03/24

MILAN (ICIS)--Eni's decision to close the industrial site at Porto Marghera, Italy in 2022 is leading to questions over the future of the nearby downstream industries which use ethylene, propylene and C4s feedstocks from the site.

Eni is reportedly set to start decommissioning at Porto Marghera in the spring of 2022, but the company did not disclose more details and did not respond to a request for comment.

The petrochemical site is key for Italy's chemicals industry; among others, Eni's subsidiary for chemicals Versalis has nameplate capacities to produce 490,000 tonnes/year of ethylene at the site, and 245,000 tonnes/year of propylene.

Within aromatics, it has production capacities of 110,000 tonnes/year of benzene, 75,000 tonnes/year of toluene, and 35,000 tonnes/year of mixed-xylenes, according to the ICIS Supply and Demand Database.

INTERTWINED
About 115,000 tonnes/year of ethylene flows via pipeline from Porto Marghera to Versalis’ low density polyethylene (LDPE) plant, and about 200,000 tonnes/year of propylene to LyondellBasell’s polypropylene (PP), both in Ferrara.

The rest of the ethylene is shipped to Asia.

Crude C4s cargos head to Ravenna to feed Versalis’ butadiene (BD) extraction unit of 140,000 tonnes/year capacity.

BD is then processed at the styrene butadiene rubber (SBR) plant in Ferrara and acrylonitrile butadiene styrene (ABS) in Mantova, both owned by Versalis.

UNCLEAR FUTURE
Porto Marghera’s cracker decommission could adversely impact on the supply chain.

At the time of writing, Eni has not disclosed any investment plan and any clarification on how to provide feedstocks to the downstream industry, although it considers Porto Marghera as a pillar of its energy transition strategy and a crucial Versalis logistics hub.

While it has said on several occasions it wants to turn the facility into a bio-based chemicals site, clear plans have not been forthcoming.

Despite the assurances given by the company in order to safeguard production and employment, some headwinds might hit the Italian chemical industry from 2022 onwards.

Italy is anticipated to turn from ethylene exporter to importer from 2023 onwards as it will face a shortage of about 100,000 tonnes/year of monomer.

Ethylene in ItalyICIS

Meanwhile, propylene is expected to be more balanced.

ICIS

DOWNSTREAM UNITS, FEEDSTOCK: TRICKY
However, the need to purchase raw materials from external sources might be less advantageous for the derivative producers, with the PE and PP units being at risk of closing down.

This, in turn, would also imply the loss of know-how and skills.

The outdated cracker has continued to operate since 2016 thanks to some three-to-five-year ethylene offtake contracts, most of which has been exported to Asia.

Prior to this, the cracker had actually been closed in 2014, but an extended outage at Shell’s Moerdijk cracker in the Netherlands in 2015 prompted its restart.

Focus article by Paolo Scafetta
ICIS Petrochemical and Refining Senior Consultant

Scafetta is based in Milan
Additional reporting by Nel Weddle in London

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