Oriental presses ahead with PDH project

30 April 2004
Egyptian Petrochemicals Holding Company (ECHEM)has signed a memorandum of understanding (MoU) with the local Oriental Groupand its sister company Oriental Petrochemicals Company (OPC)to form a project company for a planned propane dehydrogenation (PDH) and polypropylene (PP) complex, to be built near Port Said. 'We are talking with several banks and financial institutions about financing, and we are certainly not short of equity participants,' says an OPC official. 'We expect to have the results of a feasibility study in three weeks' time.'

OPC has also received revised technical bids from three groups which were prequalified in early 2002 when the project was conceived as a stand-alone PDH plant. The involvement of ECHEM in the project persuaded Oriental to double capacity at its existing 160,000-tonne-a-year (t/y) PP plant at Suez. The PDH facility would have provided propylene feedstock for the expanded plant, which would in turn provide raw materials for Oriental subsidiary Oriental Weavers. However, the companies recently decided to proceed with a worldscale combined facility on the basis of a revised technical feasibility study submitted by the US' Fluor Corporationand Nexantof the UK in December (MEED 9:4:04).

The three groups bidding for the contract are: Japan's Toyo Engineering Corporation, with Samsung Corporationof South Korea; Lurgiof Germany, which along with the Toyo/Samsung Group is expected to use technology licensed by UOPof the US; and Germany's Linde, which has proposed its own technology for the scheme.

The PDH plant will use 430,000 t/y of propane feedstock, most of which will be supplied by the gas separation plant being built in Port Said by United Gas Derivatives Company, a joint venture of BP Egypt, Italy's Agipand Egyptian Natural Gas Company (Gasco). The 350,000 t/y of propylene will in turn supply a planned 200,000-t/y PP plant on the site, although OPC is understood to be considering expanding capacity at the plant to 400,000 t/y and importing additional feedstock.

Some of the PP is still intended for the domestic market, but the decision to relocate the project from Suez to Port Said was partly motivated by export opportunities, and OPC is understood to be in advanced negotiations with a European company over an offtake agreement.

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