Maul chemical plant decision next year

Press, Volume CXV, Issue 33858, 2 June 1975, Page 14

Maul chemical plant decision next year

(From

C. S. COOPER.

London correspondent of “The Press. )

LONDON, June 1.

A decision on whether New Zealand will stand up and be counted as a participant in the booming international petrochemical industry will be made early next year.

This was indicated by the Minister of Trade and Industry (Mr Freer) in London last night after his visit to the biggest petro-chemical plant in Europe, the British Petroleum installation, near Swansea, in Males. Propositions have been put to the Government by overseas companies for the exploitation of excess gas from the Maui field, off New Plymouth: a variety of products can be made from the gas

"I would certainly hope mat we will have made a decision on which project would be most acceptable economicahv for New Zealand by the end of next March, ’ said Mr Freer. “This would include a decision on the basis on New Zealand participation with an over- ; seas company tn a partner- - ship financially favourable to < the countrv.’’ A company would be un- ■ likely to be permitted to 1 establish an industry without I substantial New Zealand in- 1 vestment. This could be i through private enterprise, i the State, or the Develop- | tnent Finance Corporation.

Mr Freer said it was recognised that virtually all the expertise and much of the capital would be from overseas. The capital investment needed to produce the volume of output sufficient to compete for world markets would be at least s2oom. The project would not be contemplated for the New Zealand market alone. Only with a guarantee of world demand for the Maui end product could rhe industry be viable. If a plant were installed just to meet New Zealand’s

needs, the cost of the products would be at least three times what New Zealand now paid to import them. Over-production The Minister was emphatic that, with a trend already apparent of world over-production of petrochemical products, and the imminent entry into the field of many oil-producing; nations. New Zealand would; have to take a long hardlook at where its markets' might lie and which pro-i ducts would survive the competitive struggle. Five or six overseas com-

5 panies had made proposals 1 to New Zealand for manuf facturing end products comi patible with Maui gas, including plastic polymers, t.PVC, ammonia, and fertiliser > base. , The acceptable proposition ; would be that which offered the best return both in New , Zealand’s national interest . and in export potential in reJlation to the huge capital inji vestment, Mr Freer said. . His visit to the BP plant * had been to see at first hand ’ the extent of the petrochemical installation, and to 1 discuss with technical exsiperts its complexities.

' The Minister toured key installations of the complex I plant. He particularly sought iinformation on environmental ■ problems, and was shown the 'monitoring to minimise atmosphere and water pollution and noise-control procedures. i Highly automated [ As any potential New Zealand plant would be, the icomplex is highly automated: jit is run completely by just more than 100 operators for each of three 24-hour-a-day j shifts. But unlike any Maui plant, i the “feedstock” is naptha, piped from a nearby oil rel finery. From this is produced a wider range of chemicals land synthetics than would ]be possible from petroleum ■gas.

It has been proposed by one interested company that Maui’s best capabilities lie in the production of ammonia and in urea, the base of nitrogenous fertiliser. These products are considered to. have a strong sales potential, extending eventually into vast markets in China and India.

But the New Zealand Government is keeping its options open, both on the overseas partner and on the products that will be produced from the Maui gas, superfluous to the firing on new power-generating stations.