Braskem, a leading company in the petrochemical sector in Brazil, and Pequiven, the main petrochemical company in Venezuela, signed on this date an agreement with a view to constituting two "joint ventures" to develop and implement in that country the most modern and competitive integrated petrochemical project of the Americas, in the Jose Complex. One of the projects provides the construction of an ethane "cracker" from natural gas with a capacity of 1.3 million t/year of ethene, integrated to the production of 1.1 million t/year of polyethylene and other petrochemical products.

The second project refers to the construction of a polypropylene plant with a capacity of 450 thousand t/year, previously announced to El Tablazo and that now will be developed within the Jose Complex. Even more integrated, the complex will have its competitiveness enhanced through the utilization of the synergies in implementation and operation, among other factors. The new polypropylene unit will begin to operate at the end of 2009, while the ethane cracker and the other units will be put in operation at the end of 2001.

The corner stone of the complex was launched on this Monday, with the presence of the President of the Bolivarian Republic of Venezuela, Hugo Chavez Frias, and the President of Brazil, Luiz Inácio Lula da Silva.

As a result of the availability of one of the most plentiful oil and natural gas reserves of the world, Venezuela offers important competitive advantages for the development of petrochemical projects, in agreement with its governors’ objectives to transform the country into a relevant player in the international petrochemical sector.

"Our agreements with Braskem are evolving in an accelerated rhythm and awaking a strong interest of plastic-processing companies to install units in the region", said Saul Ameliach, President at Pequiven. "Through this alliance, we want to promote even further our petrochemical industry’s development, ensuring the supply to our internal market and strengthening even more the Pequiven’s presence in the international markets, and generate sustainable jobs and contribute to the Venezuela development as well", he added.

To Braskem, the implementation of the projects in the Jose Complex represents an important stage in its strategy of growth with value addition and to become one of the 10 major global petrochemical companies. It also means a great stimulation to its internationalization process, started with the opening of distribution branches in Argentina, The United States and Europe.

"Such projects link worldwide scale, up-to-date technology and access to competitive raw material, resulting in lower production costs and a better profitability to our company", says José Carlos Grubisich, President at Braskem. "Besides supplying the Venezuelan market, the projects will make our access to other markets of America and Europe easier, allowing us to serve better our customers of those regions", added Grubisich.

The investments for the implementation of the ethene production unit and the polyethylene units are estimated at about US$ 2.5 billion. Braskem and Pequiven have also evaluated the possibility to invest in PVC and sodium hydroxide units.

For the two projects already defined, the modeling forecast the increase of about 30% by Braskem and Pequiven, in equal proportions, and of about 70% through a project finance with an exclusive warranty of the project’s assets themselves, financed by multilateral credit agencies to exports, development banks and private banks.

The creation of the mixed companies must be concluded within the next 90 days, with the approval of the respective Administration Councils. The society modeling establishes the equalitarian participation to both companies.

In parallel to the projects, Pequiven will build a propane dehydrogenation unit for a production of 465 thousand t/year of propene, while the PDVSA Gás will build units to extract 1,800 thousand t/year of ethane. Besides, Pequiven will make complementary investments in the Jose Complex infrastructure, increasing the total value of investments to more than US$ 5.0 billion.