EPS awards contracts to ARG and Infracor for pipeline management

EPS awards contracts to ARG and Infracor for pipeline management

Munich, September 14, 2007 – EPS, Ethylene Pipeline South, has laid the groundwork for the phase after its pipeline is put into service, awarding contracts for commercial and technical management to two companies with extensive experience in the chemical industry: ARG mbH & Co. KG (formerly Aethylen-Rohrleitungs-Gesellschaft), based in Duisburg, Germany, and Infracor GmbH of Marl, Germany.

The EPS founders intended from the start to hand management of operations over to a company experienced in pipeline management following conclusion of the project phase. EPS will remain the owner and operator of all pipeline facilities for at least 25 years, as is laid down in the articles of partnership agreed to by the seven EPS shareholders Basell Polyolefine, BASF, Borealis Polymere, Clariant Produkte (Deutschland), OMV Deutschland, Vinnolit and Wacker Chemie. This is also a requirement of the State of Bavaria, which, due to the strategic significance of the EPS for its industrial infrastructure, is involved in the financing of the project with a subsidy of almost 30% of the project budget of about 150 million euros.

EPS, as the owner and operator of the pipeline, is commissioning ARG to handle commercial and technical management. This puts management of the pipeline fully in the hands of ARG. ARG will handle the commercial part of operations, dispatching (coordinating volumes for supply programs, for example) and the technical portion of operations for EPS. Infracor will then take over technical care of the pipeline as a subcontractor for ARG.

ARG is a partnership, with the six shareholders BASF, Ineos, Lanxess, Sabic, Sasol and Westgas (Degussa) each holding a share of about 16.7%. It provides care for the ethylene network from Antwerp via Cologne to the Ruhr area of Germany, the backbone of the Central European ethylene chemical industry. Working with the company Infracor gives ARG access to proven technical units that have consistently shown their high level of responsibility and identification with ARG in their work as a service provider. Over many years, these units have also demonstrated their outstanding technical expertise in the olefin sector.

Infracor is a wholly owned subsidiary of Degussa GmbH (since January 2, 2007; previously Degussa AG). Infracor has more than 60 years of experience in the chemical industry and in many chemicals-related areas. For over 40 years it has been responsible for the technical care of the ARG ethylene pipeline network. Infracor handles the infrastructure and related service tasks: supply and waste disposal, technology, logistics, security and environmental protection. Infracor is the operator of the chemical industrial park in Marl, the third-largest such site in Germany, with some 100 production facilities, three power plants and 30 companies with more than 10,000 employees in an are a of about 7 square kilometers.

“In ARG and Infracor we have selected two highly professional and experienced companies to whom we can entrust the operational management of our pipeline,” said the two EPS General Managers Dr. Werner Döhler and Hans-Detlef Dreeskornfeld. “For all topics that involve the rights and obligations of the owner and operator of the pipeline, EPS will continue to be the right address; EPS will be a point of contact for such topics.”

Background. Ethylene is produced in a refinery by cracking naphtha. In the petrochemical industry it is an important elementary compound for the production of many products used today in day-to-day life, including household appliances, films, bottles, window frames, pipes and flooring materials. The ethylene market is closely coupled with the demand for plastics, which in turn is dependent on the growth of gross domestic product. In coming years, growth of 2% is expected in Western Europe, with 5.5% forecast for Central and Eastern Europe.

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