2007/2/26 Platts

EPDC cancels European propylene pipeline project on high costs

The European Pipeline Development Co will not be pursuing plans to build a new propylene pipeline connecting the ports of Rotterdam and Antwerp with the German Ruhr area, due to escalating costs, the EPDC said Monday.

"Rising project investment costs have made the proposition uneconomical. Project costs have been impacted by escalating steel pipeline prices, a tight pipeline construction market as well as increasing financing costs," the EPDC said a statement.

Consequently, at a "recent" general meeting, the CEO of EPDC BV recommended that the shareholders take a negative investment decision. "All shareholders unanimously accepted and so the project will not proceed further," the statement continued.

EPDC BV was founded in 2000 with the purpose of developing a 500 kilometers (311 miles) propylene pipeline to connect the Rotterdam/Antwerp are with the Germany's Ruhr valley in Nord Rhine-Westphalia.

The goal of the project was to increase the competitiveness of European propylene derivative within Northwest Europe as several producers had cited supply logistics as being one of the biggest problems facing their sector. The share holders of EPDC BV are: BASF AG, Celanese Chemicals Europe GmbH, Koninklijke DSM NV, Ineos Manufacturing Deutschland GmbH, SABIC Petrochemicals BV, Sasol Solvents Germany GmbH, Shell Nederland Chemie BV and Westgas GmbH.