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Repsol builds metallocene polyethylene plant to help secure competitive position into next decade

Repsol, the Spanish oil and chemicals group headquartered in Madrid, has announced plans for the construction of a new manufacturing unit for metallocene linear polyethylene at its Tarragona Petrochemical Complex. Construction, said the company, will start in June of this year and is expected to take around three months.

Metallocene linear polyethylene is a low-density polyethylene boasting both excellent optical properties (gloss and transparency) as well as mechanical properties (high flexibility and high resistance to puncture, tear and low temperature), which make it especially suitable in films for packaging applications. The new plant will be the first outside the United States to implement Chevron Phillips Chemical's proprietary technology for the production of metallocene polyethylene; Repsol became Chevron Phillips Chemical's first licensee of this technology in March 2014.

This new investment falls under an earlier announced set of measures to be taken within the strategic scope of the company between 2014 and 2016 and under which €63 million will be invested in the chemical plants on the company's Industrial Complex of Tarragona. The aim is to achieve a higher degree of production efficiency and product differentiation, with, as ultimate result, the enhancement and securing of the company's competitive position for the next 10 years. The new metallocene polyethylene plant, therefore, is in line with the company's stated strategy to differentiate into products that will help Repsol, as a European producer, to compete against high-density polyethylene imports from areas with access to lower-cost raw materials. High-density polyethylene, as the company pointed out, accounted for over 40% of consumption in Spain in 2014.

The project will entail a three-month shutdown of Repsol's high-density polyethylene plant in Tarragona, as the manufacture of both products shares critical facilities and equipment. However, to avoid three continuous months without production, Repsol has planned to break the shutdown into two independent one and one-half month periods.

Partially constructing the metallocene polyethylene plant while the high-density polyethylene plant remains operational represents a considerable and complex technical challenge. Safety, both of people and installations, will be a priority throughout the operation.

As the shutdown was already planned in late 2014, in order to meet its contractual commitments and anticipating historical average consumption of regular customers, Repsol has already sent all its customers confirmation of individual high-density polyethylene volume that it plans to supply to each of them. For this reason, despite the difficult times Europe faces regarding high-density polyethylene offer, the company does not intend to declare force majeure.

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