Braskem To Build Venezuelan Cracker

After dumping ExxonMobil, Pequiven, the chemicals arm of Venezuelan state oil company PDVSA, is taking on Brazil's Braskem as a partner in an ethylene cracker joint venture project in Jose, Venezuela.

Braskem and Pequiven say that over the next six months they will study the operational, technological, marketing, financial, and strategic details of the project. The companies now expect it to consist of a 1.2 million-metric-ton-per-year ethylene cracker plus downstream derivatives plants, including polyethylene units.

Additionally, Braskem and Pequiven are moving forward with their previously disclosed plans to build a $370 million, 400,000-metric-ton polypropylene plant in El Tablazo, Venezuela.

"The Jose project strengthens our strategic alliance with Pequiven and would become an international platform for our company," says Jos?? Carlos Grubisich, chief executive officer of Braskem.

Last February, Pequiven pulled ExxonMobil from a project to build an ethylene cracker and derivatives complex in Venezuela. The facility was slated to have about 1 million metric tons of ethylene capacity. "The project would have provided globally competitive plastics to the Venezuelan and world markets," ExxonMobil said in a statement. Pequiven said at the time that it would pursue the project with partners from Brazil, Japan, Saudi Arabia, or Iran.

ExxonMobil has had its problems in Venezuela. It has been a vocal opponent of leftist President Hugo Chavez's plans to squeeze concessions such as higher royalties out of foreign oil companies operating in Venezuela. Instead of giving up a majority stake in an oil field to PDVSA, as required under a new Venezuelan law, ExxonMobil sold its stake to its existing partner Repsol YPF. In light of this decision, in March, Venezuelan Energy & Oil Minister Rafael Ramirez said on television of ExxonMobil, "We don't want them here, then."