Sonatrach (Algiers), Algeria’s state-owned energy and chemicals group, has signed a memorandum of understanding (MOU) with Turkish construction group Rönesans Endüstri (Istanbul) and trading group Bayegan (Istanbul) to carry out a feasibility study to build a propane dehydrogenation (PDH) and polypropylene (PP) production complex in Turkey.
The MOU was signed in the presence of Sonatrach’s new chairman and CEO Abdelmoumen Ould Kaddour and Erman Ilicak, president of Rönesans Endüstri.
The partners will jointly conduct a detailed feasibility study for the project and assess the possibility of establishing a joint venture (JV) for its development, Sonatrach says. The project would ensure a long-term outlet for Algerian propane, which will be used as raw material. It will also meet part of Turkey’s growing PP needs. The project will involve design, engineering, procurement, construction, and operation of the two facilities. Bayegan declined to comment, saying, “This is a Bayegan project and all details are confidential.”
Bayegan has been trying to develop a PDH and PP project in Turkey for several years. At one stage it linked with Advanced Petrochemical (Jubail, Saudi Arabia), a Saudi producer of PP, to build the facilities in Turkey, but Advanced pulled out of the project and, instead, joined forces in a PDH JV at Ulsan, South Korea. The original plan involved construction of a smaller PP unit with capacity for 500,000 metric tons/year. Turkey is a major importer of PP. The only domestic producer is Petkim, with a nameplate capacity of 144,000 metric tons/year. Last year Turkey imported 1.75 million metric tons (MMt) of PP and this year imports are expected to shoot up to 2.02 MMt, says Kevin Longworth, principal analyst at IHS Markit. Homopolymer grade makes up the vast majority of the imports and Saudi Arabia is the biggest exporter, Longworth says. For copolymer grade, which is a much smaller percentage of the total, South Korea is the biggest exporter. PP imports into Turkey are growing at a rate of 4.6%/year and will grow from 2.02 MMt in 2017 to 2.53 MMt by 2022. Demand is growing at a similar pace of 4.5% over the same timeframe and with no additional capacity, the country will need to grow imports to support demand, Longworth says.
Lack of feedstock has been a major factor in the lack of domestic PP capacity. However, in addition to Sonatrach, there are other potential projects. New PP and polyethylene capacity may be built as part of Socar’s Star refinery.
Sonatrach is already a JV partner with BASF in a PDH plant at Tarragona, Spain. Separately, in 2016, Total signed an agreement with Sonatrach to build a PDH and PP complex in Algeria.
By Natasha Alperowicz
Source: Chemical Week
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