Brazilian, Venezuelan Firms Formalize Joint Venture for Petrochemical Complex

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Researched by Industrial Info Resources (Sugar Land, Texas)--On December 14, 2007, during a meeting between Venezuelan President Hugo Chavez and Brazilian President Luiz Inacio Lula da Silva, the Brazilian thermoplastics resins company Braskem (NYSE:BAK) (Sao Paulo, Brazil) and the Venezuelan petrochemical company Pequiven formalized a joint venture for a petrochemical complex at the Jose Petrochemical Complex in Venezuela. The companies had announced the joint venture in May. For more details, view related May 1, 2007, article - Brazil and Venezuela Join Together for New Petrochemical Complex in Venezuela.

The joint venture will be composed of two subsidiaries, Propilsur and Polimerica. The complex will be one of the most modern and competitive integrated petrochemical projects in the Americas. The construction of a 450,000-ton-per-annum (TPA)polypropylene plant, which is planned to be operational by the second half of 2010, will be in the hands of Propilsur, Prolipropileno del Sur, S.A. The facility will be integrated into a propane dehydrogenation unit, which will give the project operational flexibility and integration. Its total investment has been estimated at approximately $900 million.

Polimerica, Polietilenos de America S.A. will be in charge of the construction of an ethane cracker with natural gas feedstock that is scheduled to start operating on the second half of 2012 and have an ethylene production capacity of 1.3 million TPA. Three industrial plants (high-density polyethylene, low-density polyethylene and low-linear-density polyethylene) will produce 1.1 million TPA of polyethylene. The estimated cost of this phase of the project is $2.6 billion. Both companies will be equally managed by Braskem and Pequiven, which will have equal rights in the management and equal representation in the board of directors. Multilateral organizations, export credit agencies, development banks and private banks have already been contacted for the development of the project.

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