Copesul Cracker Expansion

completed

Summary Of Project Information (SPI)Project NameBrazil-Copesul Expansion ProjectRegionLatin American & the CaribbeanSectorChemicals & PetrochemicalsProject No07272Projected Board DateNovember 30, 1996Company NameCompanhia Petroquimica do SulTechnical Partner and/or Major Shareholders Copesul’s shareholders include OPP S.A. (OPP, 28%)and Ipiranga Petroquimica S.A. (IPQ, 24%). Petroquisa, a majority-owned subsidiary of Petrobras, the national oil company, owns 15%, and the balance is owned by the public. OPP and IPQ are second generation companies producing polyethylene and polypropylene. Project Cost Including proposed IFC investment The total Project cost is US$725 million. IFC’s proposed investment is US$160 million, consisting of an A Loan of US$30 million and a B Loan of US$130 million.Location of project and Description of siteExpansion of Copesul’s ethylene production facilities from 685,000 tpy to 1,135,000 tpy. Copesul is located in the southern petrochemical complex in Triunfo in the state of Rio Grande do Sul, about 37 miles west of Porto Alegre. The complex also comprises seven second generation producers. The site is 1,845 ha and is well connected by road and rail with the major market centers of the Sao Paulo/Rio de Janeiro and Montevideo/Buenos Aires areas.Description of Company and Purpose of Project Copesul is a naphtha cracker which transforms naphtha into olefins comprising ethylene, propylene and other by-products. The project entails the expansion of Copesul’s ethylene production capacity from the current 685,000 tons to 1,135,000 tons. The purpose of the Project is to meet the increased demand for plastic products brought about by renewed economic growth and stability in the country, and the trend towards substitution of plastics for more traditional packaging materials. Availability of competitively-priced monomer is a critical factor in the continued growth of polymer producers, and indirectly, in that of third-generation plastic users which account for a significant share of the domestic economy. The proposed expansion will also reinforce Brazil’s international competitiveness, a key objective of the Government’s privatization program, by bringing about greater economies of scale, increased efficiencies and lower operating costs at Copesul. Environmental Category and Issues This is a Category B Project according to the World Bank’s environmental standards. The existing plant conforms with all current Brazilian and World Bank standards. The new cracker will be built to exceed the current plant’s standards. The on-site organic and inorganic primary waste water treatment facilities will be expanded to treat the increased waste water flow from the expanded capacity, and to reduce the total quantities of contaminants leaving the site for downstream treatment by SITEL. Rio Grande state law requires that Copesul publicize both its annual request for renewal of its operating permits and its intent to seek permission to expand production. Copesul has already commenced the public disclosure process for the expansion. The State Environmental Department, FEPAM, issued Terms of Reference for the EIA in December 1995. The EIA has been completed and forwarded to FEPAM for review and comment.The Environmental Review Summary is expected to be available by September 30, 1996 from the Public Information Center.Host country location of environmental documentsTriunfo Petrochemical Complex, Rio Grande do Sul, BrazilDate SPI sent to PIC September 25, 1996For Additional Information contact: Corporate Relations Unit -telephone: (202) 473-7711facsimile: (202) 676-0365Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).