Propylene Pipelines Grow European Chemical Industry's Edge and Jobs as EU Commission Checks Funding Criteria

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). A planned $225 million propylene pipeline project, which will link Rotterdam, Antwerp, Tessenderloo and Geelen in the Netherlands and Belgium to Cologne and the German Ruhr industrial region, has been submitted for comments from European Union (EU) member states and interested third parties.

This project would be part of an expanding propylene pipeline network in Europe that is aimed at making the chemical industry increasingly competitive in global markets. The 'Chemvision' plan sees an environmentally safe connection among all propylene users and producers in northwest Europe across Belgium and the Netherlands to the ocean ports of Antwerp and Rotterdam.

Chemical sites in the northern Ruhr area will have a direct pipeline connection to the Rhine River in the propylene supply chain. As part of the 'Target 2' program, North Rhine-Westphalia (NRW) and the EU are sponsoring construction of a 42 kilometer propylene pipeline from the Rhine port of Duisburg to Marl, via Oberhausen and Gelsenkirchen that is scheduled for completion by the end of 2004. Half the financing for the $56 million pipeline is coming from the European Regional Development Fund and the NRW state budget with the balance coming from the private sector.

The propylene pipeline is seen as supporting the drive to create 200,000 new jobs by the end of 2005 under the Ruhr area Growth and Employment pact, which is supported by government and big players in the private sector. Having propylene readily available to the chemical industry for use in the production of solvents and plastics will assist in the integrated plan covering twelve economic core fields.

As the grid develops, the chemical sites in the Cologne region will be connected to then system from Oberhausen. The pipeline will then be extended to the German-Belgian border near Aachen.

The new Rotterdam-Ruhr pipeline will be operated by the 'European Pipeline Company', a consortium made up of chemical companies. The transport fees will be established at the level of competing transport modes, in particular transport by the railcar and river barge.

The three member states Germany, the Netherlands, and Belgium, plus the Ruhr region, have already pledged $58 million to the project arguing that transporting propylene via the pipeline will substantially reduce the emissions brought about by road and rail transport of the substance. This is in addition to the strategic importance of the pipeline to the propylene producing and processing industry in the affected regions in the three member states. Currently the lack of appropriate transport infrastructure has been identified as the major factor hampering competitiveness of the chemical industry in the areas concerned.

The EU Commission whether state intervention (funding) can be justified on account of the reasons invoked by the three member states as the project is a specific pipeline project initiated by a consortium of companies. The Commission will also have to assess the competitive impact of state financing in particular as regards the chemical industry in other regions concerned.