<article><p class="lead">Australian polyethylene and polymer producer Qenos will close two of its production units at its Altona chemical plant in Melbourne, Victoria later this year.</p><p>The decision comes as a result of the impending shutdown by ExxonMobil of its <a href="https://direct.argusmedia.com/newsandanalysis/article/2185554">90,000 b/d Altona plant</a> and the reduction in feedstock supply for the Qenos plants.</p><p>The planned changes to the Qenos plants include closing and mothballing one of its two Altona ethylene units and one of the two polyethylene plants, resulting in a 15pc reduction in total domestic polyethylene production, Qenos said. </p><p>"The impact of the Altona refinery closure, combined with current ethane supply volumes, means we simply do not have enough total feedstock supply to keep these plants fully utilised," Qenos chief executive officer Stephen Bell said in a statement.</p><p>Qenos operates a 205,000 t/yr ethane-fed cracker and two high-density polyethylene (HDPE) plants with nameplate capacity of 100,000 t/yr and 105,000 t/yr respectively, in Altona.</p><p>The closure and mothballing of one of its HDPE plant is expected to increase export opportunities for Asia-Pacific producers given the free trade agreements that Australia has with China, South Korea and Asean. South Korean producers can export polyethylene to Australia at preferential duty status because of the Korea-Australia FTA.</p><p>Three South Korean producers are expected to start up their new HDPE plants in 2021. LG Chem and Hyundai Chemical are expected to start their HDPE plants with 200,000 t/yr and 500,000 t/yr of HDPE capacity, respectively, in the second half of this year. GS Caltex is targeting trial runs in <a href="https://direct.argusmedia.com/newsandanalysis/article/2213696">late May</a> at its new 500,000 t/yr HDPE plant in Yosu. </p><p>Australia is also a member of Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which includes Canada, Japan, Mexico, New Zealand and Singapore. HDPE exports from these countries to Australia may also increase.</p><p>Qenos' decision to reconfigure its manufacturing plants will result in the loss of 150 of the 400 Altona-based jobs. It employs 650 people across Australia. The firm's other main manufacturing plants is at Botany in New South Wales, which is unaffected by the changes. Its petrochemical plants in Botany includes a 250,000 t/yr ethane-fed cracker, a 90,000 t/yr low-density polyethylene plant and a 120,000 t/yr linear low-density polyethylene plant.</p><p>Qenos last year signed an agreement for the purchase of up to 15PJ/yr (400mn m³/yr) of ethane for the period to 31 December 2025 for its <a href="https://direct.argusmedia.com/newsandanalysis/article/2060322">Botany plant</a>.</p><p>Qenos is a joint venture between China's state-controlled ChemChina and US private equity group Blackstone.</p><p class="bylines">By Kevin Morrison and Yee Ying Ang</p></article>
