SABIC, Sinopec Eye Plant In Trinidad

Saudi Basic Industries Corp. (SABIC) and China’s Sinopec have entered negotiations with the government of Trinidad & Tobago for a $5.3 billion methanol-to-olefins complex that would be built on the island nation.

In a filing with the Saudi stock exchange, SABIC disclosed that the negotiations are meant to define terms of natural gas supply from Trinidad’s state oil company. The government of Trinidad had received proposals for gas-based projects from other firms as well.

Although Trinidad is host to methanol and nitrogen fertilizer firms such as Methanex and Koch Industries, the country’s goal of establishing a more diverse petrochemical industry has proved elusive. In 2006, Westlake Chemical unveiled plans to build a $1.5 billion complex that would convert ethane into ethylene and polyethylene. But the company shelved its project in 2009, citing “several major constraints.”

Rather than ethane, SABIC and Sinopec would tap into Trinidad’s vast methane reserves to make olefins and downstream derivatives. Such methanol-to-olefins processes are relatively new. Air Liquide’s Lurgi engineering unit and Honeywell’s UOP licensing business both offer technologies. Thus far, most of the interest has come from Chinese firms aiming to derive chemicals from domestic coal reserves.

SABIC and Sinopec are no strangers. In 2010, the companies started up an ethylene cracker and derivatives complex in Tianjin, China. The pair plans to build a polycarbonate plant on the Tianjin site by 2015.