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Formosa Plastics agrees to delay work on Louisiana complex until 2021

July 27/2020

MOSCOW (MRC) -- A federal judge has approved Formosa Plastics agreement not to start construction work on its USD9.4 billion petrochemical complex in St. James Parish, Louisiana after opponents filed a preliminary injunction on 14 July to block work on the site, said Chemweek.

The company agreed Thursday not to build a construction dock on the Mississippi River or work near wetlands or five areas that may contain unmarked graves. The agreement will protect the site until the resolution of a lawsuit challenging federal approvals that was filed by opponents in January. The groups plan to file a motion for summary judgment asking US District Judge Randall Moss to invalidate permits issued last year by the Army Corps of Engineers.
"Now that Formosa Plastics has agreed not to disturb graves and wetlands on the site through February 2021, we can focus on this projects deeply flawed approval process, said Julie Teel Simmonds, a senior attorney with the Center for Biological Diversity, a national nonprofit conservation organization. Formosa Plastics proposed petrochemical complex, called the Sunshine Project after the nearby Sunshine Bridge, is expected to comprise 14 plants on a 2,400-acre site along the Mississippi River, which the company acquired in 2018.
Louisiana groups and national environmental organizations earlier this year filed two lawsuits challenging the Formosa Plastics project, one over its federal permits, represented by the Center for Biological Diversity, and one over its state air permit, represented by Earthjustice.
Formosa Plastics broke ground on the project in late March after receiving final permits but has now agreed to limit its construction activities until February 2021. The company plans to build the complex in two phases over 10 years. The first phase would include a 1.2-million metric tons/year ethylene plant using ethane as feedstock, with downstream facilities that will produce high-density polyethylene (HDPE), linear low-density polyethylene, and ethylene glycol (EG). A propane dehydrogenation plant and a polypropylene facility are also planned.
Phase two would include a second ethane cracker with similar capacity, another HDPE plant, and a facility producing low-density polyethylene as well as a second EG plant. The project was first announced in 2015.

As MRC informed earlier, Formosa Petrochemical slashed runs at its 540,000-bpd Mailiao oil refinery to about 68%, down from 80%, following last weeks shutdown of a secondary unit due to a fire. Even before the fire, Formosa had previously said that its gasoline exports this year would be about half of its 2019 volumes as the pandemic has hit demand from overseas markets. Any impact from a reduction in Formosas gasoline shipments would be mitigated by ample supplies in the region, said a trader who tracks petrol. Two of the units with a total capacity of 1.73 million tons per year (MMtpy) are operating at full capacity and the largest unit at 1.2 MMtpy is running at about 90% of its capacity, said Lin. The 1.2 million tpy cracker is scheduled to undergo maintenance in August.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
Author:Anna Larionova
Tags:PP, PE, ethylene, propylene, Formosa.
Category:General News
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