Brazil’s Petroquimica Uniao is preparing a $160m expansion of its ethylene capacity

Brazil’s Petroquimica Uniao (PQU) is preparing a $160m expansion of its ethylene capacity after securing a feedstock supply agreement with state-owned energy group Petrobras.

After six years of negotiations, PQU said an agreement has been reached for the purchase of 1.3m m3/day of refinery gas. Currently, the ethylene cracker, located in Maua, Sao Paulo state, consumes only naphtha.

PQU, which is controlled by Brazilian groups Unipar and Suzano, will expand its ethylene capacity by 200 000 tonne/year to 700 000 tonne/year by mid-2007, 30 months after the signing of the feedstock contract. Basic engineering work is nearly completed and the next step will be securing environmental licences.

The additional ethylene will feed a $140m polyethylene (PE) expansion at Unipar’s wholly-owned subsidiary Polietilenos Uniao. PE capacity will increase by 200 000 tonne/year to 320 000 tonne/year. In the longer term, PQU is studying a further ethylene expansion to 900 000 tonne/year, which could come onstream in 2008 or 2009.