INEOS has postponed work on the propane dehydrogenation (PDH) unit at its Antwerp, Belgium site, opting to prioritise construction of the cracker, a company spokesperson said on Friday.
The producer decided to reorganise the schedule of work on the €3bn project in response to current market appetite for ethylene, according to the spokesperson.
“There is a growing need for ethylene and it makes more sense for us to build the cracker first and then the PDH unit,” he said.
Confirmed for Antwerp in January 2019, the project is the first investment in new European cracker capacity in decades, intended to capitalise on INEOS’ investment in setting up supply lines for US shale-derived ethane stocks.
The company set up ethane storage terminals at its Grangemouth, UK, and Rafnes, Norway sites, invested in long-term shale ethane contracts, and invested in large container ships to ferry feedstocks across the Atlantic.
Oil pricing has plummeted since the company established those trade routes, but INEOS has remained focused on investing in European olefins capacity.
The 725,000 tonne/year PDH unit is one of several under development in Europe.
Borealis is developing a rival unit in Belgium, while Grupa Azoty is constructing a facility in Poland.
INEOS awarded a contract for the PDH plant to SK Engineering and Contracting in June 2019, with front-end engineering and design work planned to take place over the ensuing 12 months.
European ethylene pricing has firmed in recent months on the back of outages and strong demand, rising €65/tonne for the January contract to €860/tonne.
Source: ICIS. INEOS
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