Pequiven and Braskem in US$300mln PP JV in Venezuela

24-Nov-05

Venezuela's state petrochemicals firm Pequiven and Brazilian petrochemicals company Braskem plan to sign a project development agreement (PDA) to build a US$300mln polypropylene plant at Pequiven's oil and gas-rich El Tablazo industrial complex, Venezuela. The plant, to have a production capacity of 400,000 tpa of polypropylene, is slated to be the largest in Latin America. 40% of the project's investment outlay will be brought in equal proportion by the two partners, while other means of financing will be sought for the remaining 60%. Natural gas supplied by PDVSA will be the feedstock for the plant, which would lower the cost of raw materials compared with plants in Brazil, which mostly rely on naphtha. This partnership is part of Braskem's plans to strengthen its position as a leading petrochemicals company in Latin America and expand to other markets. The plant will have the advantage of Venezuela's geographical location, which will help it to reduce logistics expenses, since it is closer to export markets in North America, Europe and Asia.