Chlorine (Cl2), also known as molecular chlorine, is a greenish yellow gas with an irritating odour.


Chlorine is used extensively for purifying domestic water and effluents. It is an important industrial chemical used to produce pesticides, disinfectants, chlorine bleach cleaners, swimming pool chemicals, PVC plastic, synthetic rubber and other chlorinated chemicals. An important application is for the manufacture of titanium dioxide pigment.


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There are minimal imports of chlorine given the hazardous nature of this gas. Vinyl chloride monomer (VCM) is imported by Australian Vinyls Corporation. Imports of VCM contains about 130 000 tonnes of chlorine with other chemicals imported containing a further 30 000 tonnes of chlorine


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1. Chloralkali ventures in WA

See also extract report

The WA government has expectations for a petrochemical venture costing around A$2bn by year 2003 at the source of NW gas in the north west either at Hearson Cove on the Burrup Peninsula, or nearer Karratha at the Maitland Industrial Estate. Some 500 000 tpa of ethane would be used with salt supplied from Dampier Salt 20 km away. Caustic soda, EDC/VCM and caustic soda would be produced.

In July 2001, one of the venturers announced its withdrawal. Details

A restraint is the cost and availability of ethane. Domestic gas supplies (Dampier Bunbury and Dampier Kalgoorlie) jointly could by ACTED estimates (in 1999), provide for 500 000 tpa of ethane with near 100 per cent extraction which is more costly than extracting say two-thirds. (Extracting above 65 per cent requires not only lower temperatures but also removal of carbon dioxide gas). With contractually bound restraints, ethane would probably not be available from current exports but from future gas developments and providing these contained adequate ethane. Wesfarmers and Orica have both expressed interest in ammonia (and ammonium nitrate and urea) plants. The required methane would release some needed ethane.

In June 1998, Dow Chemical and Shell were identified as the preferred builder of A$2bn venture to commence construction in year 2000 and production in 2003. Other companies that were included in the Government's shortlist were BP, Dow with Shell, Hanwha, Orica and Krupp Uhde. Hanwha Corp was interested to take a share in BP Chemicals' planned ethylene cracker project with its proposed chloralkali and ethylene dichloride project. Hanwha proposed a 500 000 tonne per year of caustic soda and 620,000 tonne per year of EDC. BP proposed a 450,000 tonne/year cracker. Hanwha was also interested in Wesfarmers participation in an ammonia project.

Shell and Dow will have the right to present a formal development proposal for the project which remains subject to a feasibility study. The companies are seeking government assistance by way of infrastructure funding and amounts of A$300m have been discussed.

The project points to the need for scale. Adequate scale for chloralkali production, say 500 000 tpa of caustic would require the production of some 700 000 tonnes of EDC that requires 200 000 tpa of ethylene which is below world scale. Hence the involvement of Shell to produce other ethylene products. The problem of scale requires the production of 600 000 to 800 000 tonne of ethylene. It would make economic sense for other ethylene derived products to be produced such as polyethylene resin, acetic acid and acrylonitrile.

In April 1999 Dow/Shell announced that the Pilbara Petchem Project hinged on expansion at NW Shelf (export probably not until 2003-2005) and domestic from BHP's HBI project. (Ie. not enough ethane available from domestic supply so limiting its scale). Shell later threatened to withdraw for want of enough government subsidy.

In June 1999 the project took a tentative step forward with the jv partners Shell Chemicals and Dow forecasting a modest return on the $2 billion investment, but still only 66% of the required level; the jv is now proposing capacity increases - ethylene from 450 kt to 625 kt/year, as well as to pencil in an additional $2 billion for new, associated plants, in particular mono ethylene glycol (550 kt/year), chlorine/caustic soda (825 kt/year), and ethylene dichloride (1 Mt/year).

In 2001, the project has been scaled up to 800 000 tpa capacity of ethylene, 825 000 tpa caustic and 825 000 tpa of EDC. Surplus ethylene to be overcome by producing MEG (glycol). The project is being helped by announced LNG expansion.

In June 2001, the memorandum of understanding with the Government of Western Australia expired . Dow Chemical blamed its failure on the failure of other big gas-intensive projects to get off the ground to provide the ethane.A Shell spokesman said that while the company would not pursue a petrochemical project, Australia remained on its list of potential sites for a $4 billion gas to liquids project.

Mineral and Petroleum Resources Department acting director-general Mr Jim Limerick denied the Dow-Shell decision was a blow to WA. ``There are whole lot of other companies that have come along in the meantime that want to utilise gas up there," he said.


Our estimates of competitiveness of the chloralkali component of the venture suggests it to be marginal when freight and construction and infrastructure costs are included. ACTED estimates the net advantage at around US$20 per ECU or US$10 per tonne of caustic and chlorine (say 10 per cent by value). Not only marginal, that margin is effectively eroded for potential investors to negative values when allowance is made for the fact that Australia does not offer tax holidays unlike some competitive Asian nations. The scale and product mix suggests the project could be a "bargaining chip" to obtain an investment incentive from an Asian country.

The question of why ethane containing LNG continues to be exported, with specifications tied up in supply contracts, remains. We argue that the government failed to recognise the important role it had right up until around 1990. 

1988 venture

It is worth noting that the state has had a shaky start with a failed petrochemical venture (PICL, to produce 250 000 tpa caustic soda, 350 000 tpa of VCM and EDC). The project was to be located near Perth (Kwinana) at the end of the north west pipeline and would be using gas with a A$1.20/Gj pipeline overhead charge (ie. 70 per cent cost impost on today's deregulated gas price!). About the time of PICL, there had been an evaluation for an ammonia and urea plant by Wesfarmers but this too failed to progress though a smaller ammonia project is being built.

The project would have had to absorb a gas tariff cost of around $15 million per year! (Based on 3.2 MWh of power per ECU [an ECU is 1.0 tonne of chlorine plus 1.1 tonne of caustic soda]; and 10gigajoules per 1MWh plus gas required for the C2 part of the VCM/EDC. Add to that cost the penalty of operating at well below competitive world scale and one wonders why the government supported this project that cost it A$400million in backing this dinosaur.

Six years later, an LNG plant was established that extracts LPG but not ethane. There is inadequate ethane available to support a petrochemical project.  (See also Opinions).

One analyst has speculated about a chloralkali plant located in Victoria. More ethane can be drawn from Bass Strait gas.


The process of manufacture uses electricity and salt. In manufacture, for every 80 tonnes of caustic soda, 71 tonnes of chlorine and 2 tonnes of hydrogen are co-produced. Each tonne of caustic soda requires around 2200 kWh of electricity and 1.55 tonnes of salt.

There are three processes of manufacture.

- Mercury cell - the oldest technology employed which has been largely closed down around the world being less efficient and polluting.

- Diaphragm cell - the dominant technology.

- Membrane cell - preferred technology for new plants and now in Australia's for its smaller plants. Details of manufacture in chloralkali plants

Chloralkali production in Australia is primarily to produce chlorine, which is expensive and hazardous to transport - caustic soda is a by-product. Production centres are therefore located in the plant or, in the case of titanium dioxide pigment, over the fence and used for the manufacture of titanium dioxide, herbicides, hypochlorite and water sterilisation.

Orica operates:

- 9 000 tonne membrane cell plant at Yarwun (near Gladstone) Queensland.

- 14 000 tonnes mercury cell at Yarraville (near Melbourne) Victoria. Surplus chlorine is used to produce Cerechlor, a chlorinated hydrocarbon used in electric cables as a fire resistant plasticiser (like the phthalates plasticisers). By year 2000 it will be replaced by a larger 30 000 tonne membrane cell unit being constructed at Laverton North Victoria.

- $100 million chlor-alkali plant will be built at Laverton North. using membrane production technology. The 30 000 tonne plant is scheduled for commissioning by the end of 2000, replacing the company's older chlor-alkali plant at Yarraville.The plant will manufacture: chlorine which is used extensively in a wide range of applications, including drinking water purification; sodium hypochlorite for treating swimming pools ('pool chlorine'); hydrochloric acid which is used in steel manufacture; caustic soda which is used in the manufacture of paper, detergents and soaps, and in food processing;  chlorine that will be road freighted to Botany NSW. (Quantities not known but could be around 10 000 tpa which raises question of why the surplus capacity).

- 35 000 tonnes from mercury cell plant (1940) at Botany New South Wales to produce chlorine, hydrochloric acid, hypochlorite. Plant to be replaced by a 30 000 tonne membrane cell during 2000. (Chlorine has been used at Orica's Botany plant to produce chlorine chemicals including VCM and EDC until 1996, 1998 respectively).

Nufarm Coogee for titanium dioxide at:

- Kwinana Western Australia, producing 17 000 tonnes from bi-polar membrane cell (1991) for Tiwest Joint Venture.

- Kemerton Western Australia, producing 17 000 tonnes from bi-polar membrane cell (1988) for SCM. Elite Chemicals (a subsidiary of Ionics Inc of the US) at Brisbane Queensland (since 1986) producing 7000 tonnes of chlorine using ionic membrane cell. For sodium hypochlorite and 33 per cent hydrochloric acid.

Nufarm Limited at Laverton near Melbourne, Victoria. About 6 000 tonnes of chlorine using monopolar membrane (1989) to produce 2,4-D and trifluralin herbicides.

Kiwi Brands near Melbourne Victoria producing 1500 tonnes of chlorine from ionics membrane cell (1987) to produce sodium hypochlorite.

CSBP, subsidiary of Wesfarmers in Kwinana Western Australia, 5500 tonnes of chlorine from membrane cell to produce chlorine, sodium hypochlorite and hydrochloric acid.

(A chloralkali cell owned by Orica is mothballed at Osborne South Australia. With closure of paper mill at Burnie Tasmania, a 8 000 tonne plant was closed).

Raw Materials

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