OMV AG’s majority owned Borealis AG is resuming construction of a grassroots 750,000-tonnes/year (tpy) propane dehydrogenation (PDH) plant at subsidiary Borealis Kallo NV’s petrochemical production site in Kallo, Belgium, in the wake of delays related to allegations of human-rights violations by one the project contractors (OGJ Online, Mar. 7, 2019).
Following a halt to and subsequent suspension of construction activities at Kallo in late July and early August, respectively, Groupe Ponticelli Frères—Borealis’ newly selected contractor for mechanical and specialized piping installation on the PDH plant—restarted works at the site on Oct. 3, OMV and Borealis said in releases.
While construction works on the new plant will gradually continue to ramp up, the 2-month suspension of construction activities will delay commissioning of the PDH plant to second-half 2024 from its previously targeted startup in 2023, the operators said.
Plant construction initially came to a halt on July 27 after news reports surfaced accusing project contractor IREM SPA of human-rights violations at the site, including allegations of human trafficking, according to separate releases from Borealis and Ponticelli, which was jointly awarded the initial contract with IREM for mechanical works—equivalent to about 80% of overall project construction—on the plant in February 2022.
On Aug. 3, Borealis decided to indefinitely suspend construction under the IREM-Ponticelli contract to allow enough time for an investigation by Belgian authorities, as well as to implement additional measures to control and prevent any further potential wrongdoing by subcontractors at the site.
In mid-August, Borealis terminated its contract entirely with IREM, according to an Aug. 18 release from the operator.
In an Aug. 29 release, IREM said it was not directly the subject of any formal accusations from the Belgian authorities but that it was fully complying with an investigation focusing on non-European Union workers hired by IREM for the Kallo PDH plant project.
With the investigation presumably still ongoing, further details regarding the allegations have yet to be officially confirmed.
The nearly €1-billion Kallo PDH plant project, which began construction in September 2019, had reached nearly 80% completion as of August 2022, according to OMV.
