SABIC drops plan for Dutch cracker

SABIC Europe is shelving plans for a new ethylene cracker at its site in Geleen, the Netherlands. According to a SABIC statement, "The investment costs and financial risks are too high to realize a financially sound project on the Geleen site today." The decision comes just six months after SABIC Europe announced with some fanfare its plans for the cracker, its fifth at the site (C&EN, Dec. 12, 2005, page 22). Despite the delay, SABIC Europe CEO Frans Noteborn says the company remains committed to the European market and to its goal of being one of the top two marketers of polyolefins in Europe. Ironically, he notes that the main reason for the high investment cost is not a slump in demand, but the opposite: Demand is so heated that producers are striving to build capacity to supply it, causing stiff competition, and thus high prices, for global contracting and construction services. For example, Ineos has just announced plans to expand its ethylene cracker in Cologne, Germany. The $50 million addition will be brought on-line during 2008, adding about 100,000 metric tons per year of ethylene capacity.