OMV and Borealis invest significantly in expansion of Burghausen site

o OMV and Borealis invest EUR 840 mn in the expansion of their petrochemical production capacities o Increase of ethylene production to 450,000 t per year; increase of propylene production to 560,000 t; increase of polypropylene production to 570,000 t o New plants successfully on stream with the implementation of the innovative Borstar® and metathesis technologies o Expansion of polypropylene capacities to address growing demand for advanced packaging products and medical applications o Inauguration Ceremony on September 10, 2008 under the patronage of Emilia Müller, State Minister of Bavaria for Economy, Infrastructure, Transportation and Technology In November 2006 OMV Aktiengesellschaft first announced their EUR 1.1 bln investment in Bavaria. So far EUR 640 mln have been invested in Burghausen refinery and an additional EUR 200 mln were invested by Borealis in the expansion of their neighbouring plastics production facilities. Since the successful OMV shutdown in 2007, the production and conversion of petrochemical base chemicals into innovative plastics products on the premises of OMV and Borealis have been flawlessly coordinated. OMV has increased the ethylene production by 110,000 t to 450,000 tpa and the propylene production by 315,000 tons to 560,000 tons. The boost of the polypropylene production by 330,000 tons to 570,000 tons has increased Borealis' polyolefin capacities to 745,000 t in total. Thus, Burghausen has become the ninth largest polyolefin site and the third largest polypropylene site in Europe. By acting as the patron of the Inauguration Ceremony, Minister of State for Economy Emilia Müller recognises the innovative technologies and the potential to supply the plastics industry, which are two priority areas for the highly integrated Burghausen site. OMV achieved these capacity expansions with the construction of the new metathesis plant, the expansion of the ethylene plant as well as the construction of a major cracker furnace. Borealis expanded its polypropylene production by integrating an additional Borstar polypropylene plant on their premises in Burghausen. Development started in 2006, and the plant started up in spring of 2008 after a major OMV shutdown for the integration of the new components. The ethylene and propylene plants as well as the polypropylene production plant are running smoothly and provide reliably the production output as planned. Following a routine optimisation phase it will now be possible to operate at more than nameplate production capacity in several new plants. Especially the innovative methathesis plant, the first of its kind in Europe, was successfully integrated into the refinery system within a short period of time, despite a lack of prior experience. The production of petrochemical base materials is exceptionally efficient using metathesis. Today, this environmentally friendly method is considered one of the most significant innovations in recent years, causing a revolution within the chemical industry. On the one hand, less technical input is needed than with other conventional technologies; on the other hand, propylene production consumes 50% less energy. Simultaneously with the OMV petrochemical plant expansion Borealis, which is directly connected with the OMV refinery, expanded its capacities, by 80% from 415,000 to 745,000 t of polyolefin per year. Based on the proprietary Borstar technology, the plant converts highly pure OMV propylene produced by metathesis into polypropylene, a multi-purpose plastics material. These newly developed materials facilitate the design of innovative plastics that open up new areas for applications such as specialised medical appliances and advanced packaging for the food industry. In addition, Borealis lives up to its commitment to energy efficiency and protection of the environment. The innovations in process design and the implementation of the Borealis-owned catalyst technology allow for energy savings of 16,000 MWH per year as well as for an increase in energy efficiency of 20%. The plant is one of the most advanced facilities of its kind worldwide. The mineral oil market has undergone a rapid change over the last few years, with increasing importance of propylene and ethylene extraction from crude oil. As base materials for a wide range of chemical and petrochemical products, propylene and ethylene play a key role in the chemical industry and are experiencing increased demand. OMV continuously invests in this area, producing more propylene and ethylene and therefore creating more value compared to conventional refinery products. Due to forecasts predicting higher production capacities and as one of the major suppliers, OMV creates substantial value at the Burghausen site to strengthen the Bavarian Chemical Triangle and the Southern German plastics industry. With well-directed investment programmes for the existing refinery sites, the group consistently executes its corporate strategy of expanding its petrochemical production. After the kickoff of the 360 km Ethylene Pipeline-South (EPS) between Münchsmünster and Ludwigshafen expected for 2009, OMV will be linked to the Western European ethylene network as well. The strategically important connection between the southeast Bavarian Chemical Triangle and the significant northwest European ethylene network around Ludwigshafen will then be established. The company will be able to react even more flexibly to market volatility and can ensure the greatest possible supply security. The EPS will effectively secure the competitiveness of the Burghausen site. OMV currently plans a 800 MW combi-cycle power station for the generation of electricity and steam for the Burghausen refinery. This is an important step towards both an extension of the value added chain from gas to electricity and the securing of the location. The feasibility study on hand concerning this power station project came to a positive conclusion. With the integration into the refinery the efficiency will be further increased by 5 % on average - and the energy consumption will be significantly reduced. The synergies achieved will be an improved environmental protection and a higher profitability. The decision regarding the investment should be made by the end of 2008. 2012 would thus be the earliest start-up date. (Press Release)