UNIPETROL, a.s. (“Unipetrol”) informs that today UNIPETROL RPA, s.r.o., 100% owned subsidiary of Unipetrol, signed an EPC (engineering, procurement and construction) contract with Technip Italy S.p.A. (“Technip”) on construction of the new polyethylene unit (PE3) at Litvínov plant.
New polyethylene unit (PE3) will be producing high density polyethylene (HDPE) which is also produced by current two polyethylene units in operation. Production process and technology for PE3 unit will be based on the license agreement signed with INEOS in October 2013. PE3 unit will be among the most advanced units of this type in Europe. Its construction is the key investment project within Unipetrol Group Strategy 2013-2017 announced in June 2013. Strategy specified that petrochemical business will be the key profit maker of Unipetrol Group in the mid-term horizon and this strategic rationale has been already confirmed by the development during last two years since the publication of the Strategy.
Total contract price is EUR 213 million (CZK 5.76 billion). Total CAPEX for the whole PE3 unit project including the already purchased license and works to be performed by other contractors will be approximately CZK 8.5 billion, i.e. it is the biggest investment in the history of the Czech petrochemical industry.
PE3 unit will consist of two lines, natural line with production capacity of 270 kt per year and black line with production capacity of 100 kt per year. Total production capacity of the unit will be 270 kt per year, i.e. if black line is utilized on 100% natural line will produce maximally 170 kt per year.
Unipetrol’s production capacity of high density polyethylene (HDPE) is currently 320 kt per year, i.e. polyethylene unit 1 (PE1) – 120 kt per year, and polyethylene unit 2 (PE2) – 200 kt per year. PE3 unit will replace PE1 unit. Therefore Unipetrol’s production capacity will increase to 470 kt per year (PE2 & PE3).
PE3 unit will enable a higher utilization of the steam cracker unit producing ethylene which is further processed on polyethylene units and will also contribute to higher integration of Unipetrol Group’s refining and petrochemical production. PE3 unit is expected to bring a significant positive impact on Unipetrol’s Group profitability as well. Moreover the most advanced technology will increase safety and reliability of the production.
Investment into PE3 unit reacts on the world trend of declining demand for basic ethylene and on the other hand increasing demand for high density polyethylene (HDPE). New unit will enable production of the most advanced types of polyethylene for which there is a high demand on the European market. Thanks to the new technology Unipetrol will be able to target other industrial segments such as cosmetic or packaging.
At the moment companies Metrostav and ČKD Praha DIZ are already present on the site at Litvínov plant performing all preparatory works needed for the construction of PE3 unit itself. Technip will start construction works during second quarter 2016. End of the construction is planned for the first quarter 2018 and commissioning for mid-2018.
In Prague, 10 September 2015
UNIPETROL, a.s.
Regulatory announcement No. 23/2015