Eni pushing ahead with cracker closures at loss-making Versalis

Milan, Italy – Versalis has progressed its restructuring programme with the shutdown of a steam cracker in Brindisi, south east Italy, in March, parent group Eni has reported.

The energy & petrochemicals major disclosed its ‘transformation’ plan for Versalis last October: including an exit from cracking and reducing exposure to basic chemicals.

Eni reported 24 April that it was on track with revamping ‘underperforming activities’ within Versalis, including the planned shutdown of a second cracker in Priolo by the yearend.

“The transformation of Versalis over the next four-to-five years is a major positive source of self-help, amounting to €1 billion/year EBIT improvement by 2030,” the group stated.

The Italian group said it had reached agreements with relevant institutions and unions on the details of its transformation plan.

This included an agreement with the Sicilian authorities, to invest €900 million in its Priolo site to build a bio-refinery and a platform for chemical-recycling of plastics.

In other updates, Versalis reported a 7% year-on-year decrease in first quarter volumes to 800 kilotonnes, due mainly to lower demand and plant shutdowns.

“Commodity prices did not recover feedstock and energy input expenses, due to European headwinds, sluggish economic activity, and competitive pressures from players with better cost structures,” added Eni.

For the three months to end of March, Versalis, reported a proforma adjusted loss of €243 million – 45% above a loss of €168 million recorded for the first quarter of 2024.

Downturn, said Eni, continues in the European chemical sector, driven by macro headwinds and higher production costs compared to other geographies.

Such costs have reduced the competitiveness of Versalis production with respect to US and Asian players in an oversupplied market, concluded the group.