Honam Petrochemical to sign JV with Qatar Petroleum

02-Jan-07

South Korea's Honam Petrochemical Corporation hopes to sign a joint venture deal with Qatar Petroleum (QP) for the Mesaieed mixed feedstock petrochemicals complex. Honam and QP have finalised the complex's configuration and product slate at an ethane and naphtha cracker with a total capacity of 900,000 tpa, to produce butane to be converted into propylene. This will feed two propylene units with total capacity of 700,000 tpa. A naphtha reformer will also be installed to produce benzene, which in turn will be converted to 600,000 tpa of styrene monomer and a 200,000 tpa polystyrene unit. The signing of the deal could take about six months, depending on the amount of time taken to conduct negotiations and finalise the joint venture agreement. Honam signed a memorandum with QP last December to take a 30% stake in the grassroots project, at an estimated project cost of US$2,600 mln. The final investment amount is expected to be higher, due to the lack of natural gas and rising construction costs that have escalated costs in the region. Bids are under evaluation for the project management and front-end engineering and design package for the project, estimated for completion in 2010.