Uncertainties haunt heavy industries
PORT SPAIN
Trinidad Express
Petroleumworldtt.com
17 10 08
THE International Steel Group (ISG) steel plant referred to in the previous article started operations in 2000 as a new-technology steel-making plant owned by Cliffs and Associates Limited (CAL). The Circored Hot Briquetted Iron (HBI) produced by the only plant of this type, used a patented technology developed by the then Lurgi Metallurgie (now Lurgi GmbH). It had a production capacity of 500,000 tonnes of HBI per annum. When demand for HBI slowed and prices fell, CAL shut down operations. In 2004, the idle plant was acquired by the ISG, which conducted operations for just over a year before ISG global was, in turn, acquired by Mittal Steel.
According to a source close to ISG, upon purchasing the plant, Mittal promptly shut down its operations. "That was back in December 2005, I think," said the former manager. "Mittal terminated the services of more than 100 employees. Currently, there are less than 20 persons retained. The plant uses its conveyor system to NEC's Savonetta Pier 4 to export 'fines', a waste from smelting that the plant previously utilised. ISG now exports 'fines' to the Arcelor-Mittal plant. It has also been importing aggregate in bulk and selling the construction material to local contractors."
Of the other mega-plants scheduled to come on stream, Alutrint is the most advanced-and that has reached only the test-piling stage. Start of construction is expected by early 2009. Alutrint, a joint venture between the NEC and Venezuelan aluminium company SURAL (60% to 40%), was first scheduled to start construction works back in May 2007, according to then Energy Minister, Dr. Lenny Saith. Now that plant is two years behind schedule, its US$600 million original cost also may have increased. Financing, which will come from China's Exim Bank, is set at 70 per cent of the cost of the plant. China's EPC contractors will construct the smelter.
Of its 125,000 tonnes of aluminium per annum, Alutrint first said 5,000 tonnes would be for local, independent downstream entrepreneurs, 60,000 tonnes would be earmarked for a rod mill, and 60,000 to the cable and wire facility, according to a Jamaica Gleaner report on April 2007. There are conflicting reports on the final use of Alutrint's end-products.
What of the other mega-plants? CariSal's general manager, Roger Moore, does not classify his plant as "mega". He said he expects his CEC from the EMA soon, and hopes to 'break ground' in early 2009. "Our plant is not a very big one and we do not need to wait on infrastructure works on NEC's Point Lisas East estate. We have road frontage on the Southern Main Road, so we can start construction as soon as we receive all our clearances." The plant will be located opposite Yara Limited in Savonetta. Moore said the plant, when it reaches full capacity, would produce 100,000 metric tonnes (MT) of caustic soda per annum, 75,000MT of calcium chloride, 34,100MT of hydrochloric acid, and 53,300MT of sodium hypochlorite. Moore confirmed a PRnewswire August 2008 release that Denham Capital of Houston will make an equity investment of up to US$50 million in CariSal. The company already has an agreement to sell its caustic soda to Alcoa.
Meanwhile, MHTL's AUM complex is in the midst of construction, but also behind schedule. Work on the complex began in March 2006. The complex comprises the following:
- 1 Ammonia Plant: 1,850 metric tonnes per day (MTPD)
- 1 Urea Plant (solution): 2,076 MTPD
- 1 UAN Plant, comprising:
- 1 Nitric Acid Plant: 1,500 MTPD
- 1 Ammonium Nitrate Plant: 1,905 MTPD
- 1 UAN Mixing Plant: 4,300 MTPD
- 2 Melamine Plants: each 90 MTPD
The melamine plants are expected to come on stream in early 2009, three years after MHTL 'broke ground'. Delays are also expected in the other plants, attributed to heavy demands on international firms capable of constructing such plants. But, said a source close to the AUM complex, because it is part of MHTL's 'methanol empire', it would hardly suffer for lack of capital or having to face increase financing costs. Still, it will not be fully operational until 2010-12.
No official spokesperson could be reached to talk about the US$830 million ANSA's UAN plant, which was scheduled to be built at Union Estate. In May, 2006, ANSA's Norman Sabga, and president of the NEC, Prakash Saith, signed a "final project agreement" for the proposed complex. But sources in heavy industry said, "ANSA seems to have abandoned the idea." Shortly after the agreement, Sabga said, "We are still very heavily in negotiations to get a favourable gas price. We believe that we will not go ahead with the project unless we can be competitive with the other ammonia plants in T&T. Once we have ironed that out by the end of 2006, we should have an ammonia plant." It is believed ANSA did not get a favourable response from the NGC, hence its decision to abandon the local conglomerate's foray into heavy industry.
Other mega-plants that are in the pre-construction-queue include a Methanol/ Propylene/ Polypropylene (MTP) complex. Back in December 2007, Basell, the NGC, and the NEC announced that they had entered into an MOU to construct and operate a fully integrated polypropylene complex. In September last, the parties signed a project development agreement for the complex, which includes the construction of a methanol plant, which will exclusively supply a methanol-to-propylene unit at the complex. The propylene produced at the complex will be the feedstock for a world-scale 490,000 per year polypropylene plant based on Basell's Spherizone technology. Start up is scheduled for 2012. This project will be undertaken in conjunction with Lurgi GmbH, the leader in methanol and methanol-to-propylene (MTP) technology.
The gas-to-liquids plant, a joint venture between World GTL of the USA and Petrotrin, is being constructed on the local oil company's Pointe-a-Pierre compound. It is World GTL's first venture using scrapped and rebuilt, re-configured methanol plants as its core of the GTL process. It also uses a Lurgi reactor and a hydro-cracker. The plant will utilise excess gas from Petrotrin to produce 2,200 barrels of high-quality liquid fuel, which, in turn, would be blended to produce cleaner diesel. There are reports that the plant, which was expected to come on stream by the end of this year, has run into some technical difficulties. However, no senior official was in Trinidad to comment on this.
Energy experts said many similar mega-projects being built in oil and gas rich countries have run into problems. "Because of the global financial crisis, some have encountered financing problems," said one expert. "In instances where they were being financed by firms that have suffered badly, they would have to find alternative financing." Also, sharp drops in metals and commodities' prices have caused some new players to re-think their positions.
Mittal (Trinidad) has shut down
its three DRI plants and its rolling mill, saying they will be back on stream in January. DRI is used extensively by plants that also use scrap metals in their steel making process. "Scrap metals' prices have also plunged," said an industry source. "It's therefore cheaper for those plants to use scrap instead of DRI." Mittal has retained its workforce and some contractors. While the workers feel confident operations will resume early next year, some experts remain doubtful over the plant's future.
Former Minister of Energy Dr Lenny Saith had said that the integrated complex will comprise an ethylene cracker complex and a polyethylene plant complex. He added that small and medium enterprises would be opened with opportunities with the project providing Government with an equity stake of up to 30 per cent. The project would be developed over three phases, with the first phase requiring an input of 37,500 barrels per day of ethane for the production of 570,000 metric tons per year of ethylene plus derivatives
There are also five gas-based projects which are due to come on stream in the short term. They are:
- the Essar Steel Complex which involves the establishment of an integrated steel complex producing flat hot rolled coil as well as hot briquette iron and slabs;
- Methanol/Propylene/Polypropylene (MTP) - Discussions on Project details between Lurgi and the Government are ongoing. Basell, a joint venture between BASF and Shell is proposing a 160,000 tonne per annum plant at a capital cost of TT$9.5 billion;
- the Methanol Holdings' AUM Complex with a proposed capacity of the plant is 1.5 million tonnes per annum of Urea Ammonium Nitrate and 60,000 tonnes per annum of Melamine: the capital cost is TT$10.1 billion;
- the Alutrint Smelter Complex: the capital cost is TT$1.65 billion and will produce 125,000 metric tonne per annum, all of which will be used for downstream industries.
On March 6, 2006, Methanol Holdings (Trinidad) Limited (MHTL), a world-class player in the methanol industry, began site preparation for the construction of a US$1.2 billion Ammonia/Urea/Melamine (AUM) petrochemical facility at Point Lisas Industrial Estate, Trinidad. This facility, which will utilize integrated ammonia and urea plants to produce melamine and Urea Ammonium Nitrate (UAN) 32 solution, is the first of the five energy-related projects, which Government anticipated would break ground in 2006.
Other planned projects that have the Government endorsement include: -
- ANSA UAN (Ammonium/UAN),
- Alutrint Aluminum and Downstream,
- Alcoa Aluminum and Downstream, and
- Essar Steel (hot briquette iron) and Downstream.
The AUM project comprises seven individual plants as follows: -
Plant Rated Capacity
- 1 Ammonia Plant 1850 MTPD
- 1 Urea Plant (solution) 2076 MTPD
- 1 UAN Plant, comprising:-
- 1 Nitric Acid Plant 1500 MTPD
- 1 Ammonium Nitrate Plant 1905 MTPD
- 1 UAN Mixing Plant 4300 MTPD
- 2 Melamine Plants each 90 MTPD
By Raffique Shah, from Trinidad
& Tobago Express
Trinidad
Express
Wednesday, November 12th 2008
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