The Engro Corporation will make an investment of $31.4 million to evaluate the potential of setting up a propane dehydrogenation (PDH) plant in Pakistan to produce polypropylene for the domestic demand.
According to the notification issued to the Pakistan Stock Exchange (PSX), the Board of Directors has given the green signal to the management to embark upon a research study on engineering, design, and technology, including a Front End Engineering Design (FEED).
When completed, the results of these studies are expected to inform the final investment decision in relation to this project, which will also be based on a conducive policy environment and arranging the right mix of debt and equity partners at such time, the notification stated.
A final investment decision on the project will be based on the results of the study, as well as Pakistan’s policy and financing environment, it added.
The planned plant will be the first of its kind in Pakistan as there are no PDH plants in South Asia that produce PP. India is the only country in the region that produces PP at its crackers and refineries.
According to an estimate, Pakistan had imported 503,572t of PP in 2020, of which 48 percent was from Saudi Arabia, 19 percent from the UAE, and 15 percent from Kuwait.
This was up by 22 percent from its 2019 imports of 412,429t, of which 50 percent had come from Saudi Arabia, 18 percent from the UAE, and nine percent from India.
Pakistan is a net importer of LPG, and the propane feedstock for the planned plant will boost the country’s imports. It is expected to produce 743,000t and import 330,000t of LPG this year.
This compares with its 731,000t of production and 331,000t of imports in 2020.