A firm agreement has been struck between Versalis, Eni and Sarlux, Saras. The agreement marks the formal transfer of the industrial plants located in Cagliari, Sardinia. The agreement is an effort to facilitate the meshing of the Sarlux refinery and the petrochemical complex of Versalis. The deal is aimed at fostering greater synergy between the two entities, with an eye to increased competitiveness in the long term. Consolidation of industrial processes is perceived as the only workable means of tackling the high-cost structure associated with the industry. Three key cost elements have been identified:
• The proximity of the industrial operations to the outlet markets
• Structural costs associated with the separation of the companies’ industrial operations
• Falling oil prices and persistent economic weakness
The deal officially ratifies an 80% interest that Eni has in Saras. The petrochemical plant at Sarroch is located in Italy’s south-western coastal enclave of Sardinia. The December 29th agreement will make Sarlux’s Sarroch refinery (300,000 BPD) more competitive for European operations. Presently, the recessionary economic climate in Europe coupled with historically low oil prices is squeezing the petrochemical industry. With sustainability of operations as the prime objective, the agreement between the two companies is seen as imperative.
1. The propylene splitter used for separating propane for petrochemical applications and domestic consumption
2. The catalytic reforming unit for hydrogen and petroleum production
3. Formex and BTX units for splitting aromatic components
As yet, the actual value of the financial agreement has not been made available to the general public. In terms of production activity at the Sarroch refinery, full capacity has not been reached. This is a result of its stand-alone nature. Recently a 5-year maintenance project (for safety and reliability) was completed at the fluid catalytic cracking unit at the Sarroch refinery. During Q3, 2014 production capacity averaged 227,000 BPD, down 13% year-on-year from Q3 in 2013.