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Thai company indefinitely postpones planned polyethylene plant in Ohio

June 01, 2020

Petrochemical Update:

Thailand-based PTT Global Chemical’s long-awaited final investment decision (FID) to build an ethylene-polyethylene complex in Ohio will remain under consideration for an indefinite period.

“Due to circumstances beyond our control related to the pandemic, we’re unable to promise a firm timeline” for an FID, the company said in a mid-May email referring to the project to turn shale gas ethane into ethylene to polymerize into 1.5 million tonnes annually of polyethylene.

The Bangkok Post had reported as recently as on Feb. 12 that a decision related to the FID was going to be announced by mid-year. It quoted the company’s CEO Kongkrapan Intarajang saying PTTGC was seeking low interest financing for this project as it was a good fit in a strategy to expand overseas revenue.

However, an industry expert told Petrochemical Update that conditions needed for such a complex had deteriorated even before Covid-19.

“Prior to the pandemic the planned PTTGC project for Ohio faced a cumulative set of troublesome risks,” Tom Sanzillo, director of finance at the Institute for Energy Economics and Financial Analysis, an organization that examines issues related to energy markets. “The pandemic only increased the weak fundamentals and created greater uncertainty about the fate of the project,” Sanzillo told Petrochemical Update on May 25.

PTTGC officials have given a number of firm dates for final decision and now they have put the decision off indefinitely, he said. “It would be a very big surprise if this project was revived. The oversupplied market, low prices, increased competition and now an unpredictable demand outlook and uncertain growth path all weigh to the downside,” he added.

[Renzo Pipoli]

More: Thailand’s PTTGC indefinitely postpones Ohio project amid challenges

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