Braskem and Petroquisa Jointly Construct Petrochemical Plant in Brazil

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Researched by Industrial Info Resources (Sugar Land, Texas) – Braskem (NYSE:BAK) (Sao Paulo, Brazil) and Petroquisa (Rio de Janeiro, Brazil) formed in 2005 the Petroquimica Paulinia S.A., joint venture, which will operate a modern and competitive industrial polypropylene production unit in Paulinia, near Petrobras’s Replan refinery in Sao Paulo state, Brazil. This petrochemical plant represents an important phase in the association between Braskem and Petroquisa, which will have an initial production capacity of 300 thousand tons per year of polypropylene. Furthermore, the plant has the potential to reach 350 thousand tons per year capacity. The plant’s pre start-up operations will begin by the end of 2007. The project will demand a $240 million investment. Thirty percent of the total financing will be provided directly by the shareholders and the remaining 70% will be provided through long-term financing. For more details, view related August 8, 2005, news article – Strong Growth Potential Spurs Moves for Braskem and Basell in Brazil’s Polypropylene Sector.

Braskem holds a 60% of the joint venture while Petroquisa 40%. Petrobras will provide for the high polymer propylene that will be used as raw material and that is produced at Petrobras’s Refineries: Paulinia (Replan) and Henrique Lage (Revap), both located in the Sao Paulo State. These refineries are constructing two propylene units that will produce the propylene necessary for Petroquimica Paulinia S.A.

The Revap propylene construction is being carried out by a consortium between Odebrecht (70%) and UTC Engenharia (30%), and construction work has begun in August 2007 and is programmed to end in July 2008. The Replan refinery propylene unit addition is being carried out by UTC Engenharia, and it will produce 265.000 tons per year. Both construction contracts at Revap and Replan have been valued at $166 million and $210 million respectively. The 265.000 tons production from the new unit at Replan Refinery will feed Petroquimica Paulinia Polypropylene plant and Revap will provide for the remaining 35.000 tons per year.

According to authorities from Braskem, the joint venture with Petroquisa shows confidence on the part of both companies in the growth of the Brazilian economy and the regional thermoplastics resins markets, in which polypropylene consumption has evolved at a high speed. Furthermore, Petroquisa’s officials have stated that Petroquimica Paulinia represents a confirmation of the decision of the company in having a strategic part on the development of the Brazilian petrochemical sector.

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