BASF and Sonatrach set up JV in Spain
Assuming that European Union authorities give their approval, the new joint venture, which is called Propanchem S.A., will build and operate a plant at BASF's Tarragona site for the dehydrogenation of propane to propylene, the starting material for the plastic polypropylene. This plant will have an annual capacity of 350,000 metric tons and is expected to come on stream in early 2002.
BASF will hold 51% of Propanchem and Sonatrach 49%. The Algerian oil and gas company, the world's second largest exporter of liquefied petroleum gas (LPG), will supply the necessary propane. The customer for the propylene will be Targor Iberica S. A., a joint venture between BASF and Hoechst. The polypropylene producer plans to build another polypropylene plant at the Tarragona site with an annual capacity of 225,000 metric tons. This facility will come on stream at the same time as the propane dehydrogenation plant.
As part of the project a cogeneration power plant will be built at the Tarragona site and operated by RWE Energie together with a Spanish partner. The power plant, with an output of 350 megawatts, will provide long-term supplies of electrical power, gas and steam to the Tarragona site after it begins operation in 2002. The construction of the propane dehydrogenation plant and the new polypropylene plant will increase five-fold the steam demand at the Tarragona site, while the power requirement will more than double. At the same time, surplus gas produced at the power plant from the propane dehydrogenation can be converted to electrical power and steam.
"Our cooperation with Sonatrach means more than just an improved supply of raw materials to our Targor joint venture," says Eggert Voscherau, member of BASF's Board of Executive Directors. "It will also make a contribution to the expansion of our Verbund production at our Tarragona site and help secure the future of our largest site in southern Europe."
A. Attar, Sonatrach's chairman and CEO, underlining the importance of this agreement, said: "Today we are setting up a joint venture with one of the world's major companies in the chemical industry. This enables us to consolidate our leading position as a gas supplier in the Mediterranean and to demonstrate our ability to execute the largest and most varied innovative measures for the valorization of our hydrocarbon resources. It is a first step marking the return of Algerian petrochemistry and it promises many other benefits for our industrial sites at Arzew, Skikkda and elsewhere in Algeria."
BASF is a return-focused global company generating growth and superior profitability from its activities in chemicals, health and nutrition, and energy. The company's products range includes high-value chemicals, plastics, dyestuffs, automobile coatings, crop protection agents, pharmaceuticals, fine chemicals, crude oil and natural gas..
Sonatrach's core businesses comprise exploration, production, transportation of liquid and gaseous hydrocarbons, natural gas liquefaction and hydrocarbons transformation, refining, production and marketing of petrochemicals. Sonatrach is also involved in domestic distribution of oil products, shipment of hydrocarbons, civil engineering, drilling, well services, geophysics and major oil services.