The Kwinana petrochemical plant was a never-realised

petrochemical plant The petrochemical industry is concerned with the production and trade of petrochemicals. A major part is constituted by the plastics (polymer) industry. It directly interfaces with the petroleum industry, especially the downstream sector. Compan ...

proposed in the late 1980s to be developed in Kwinana, Western Australia. In September 1986 Petrochemical Industries Company Limited (PICL), a joint venture involving companies controlled by property developer Dallas Dempster and merchant banker

Laurie Connell Lawrence Robert "Laurie" Connell (died 27 February 1996) was a Western Australian business entrepreneur. As chairman of the Rothwells merchant bank, he was well known for his dealings with the Government of Western Australia and his close rela ...

,State Law Publisher of Western Australi
Findings of WA Inc Royal Commission
Vol. 4, Ch.18. Retrieved on 9 November 2012. proposed the development of a major

petrochemical Petrochemicals (sometimes abbreviated as petchems) are the chemical products obtained from petroleum by refining. Some chemical compounds made from petroleum are also obtained from other fossil fuels, such as coal or natural gas, or renewable so ...

project at Kwinana, and on 2 November 1987 agreements were signed by the state government-owned State Energy Commission of Western Australia and PICL for the former to supply the latter with natural gas from the state's North West Shelf, at a commercially realistic price, linked to

CPI A consumer price index (CPI) is a price index, the price of a weighted average market basket of consumer goods and services purchased by households. Changes in measured CPI track changes in prices over time. Overview A CPI is a statistic ...

. By December 1987, though, it was becoming apparent that Connell's merchant bank,

Rothwells Lawrence Robert "Laurie" Connell (died 27 February 1996) was a Western Australian business entrepreneur. As chairman of the Rothwells merchant bank, he was well known for his dealings with the Government of Western Australia and his close rela ...

, was no longer a viable financial institution, and Dempster had been unable to secure 100% debt finance for the project.State Law Publisher of Western Australi
Findings of WA Inc Royal Commission
Part IIState Law Publisher of Western Australi
Findings of WA Inc Royal Commission
Vol. 5, Ch. 21 Due to outstanding loans to Connell and Connell-associated entities, Rothwells was short $300 million or more needed to restore its solvency and produce an acceptable balance sheet, and without these funds Rothwells would have to cease trading on its reporting date, 31 July 1988. In order to deal with Rothwells's impending crisis, a mid-1988 meeting involving representatives of the state government, Rothwells and Alan Bond's

Bond Corporation Alan Bond (22 April 1938 – 5 June 2015) was an English-born Australian businessman noted for his high-profile and often corrupt business dealings. These included his central role in the WA Inc scandals of the 1980s, and what was at the time ...

agreed that the government would give a discounted energy price and other guarantees to PICL so as to boost the company's value to $400 million, and Bond Corporation and the government would then purchase PICL for that price – $350 million to be paid to Connell so that he could repay $300 million of his debt to Rothwells and add $50 million of liquidity, and $50 million to Dempster for his share. When PICL was sold to the state government and Bond Corporation its sole real asset was a heavily-mortgaged block of land in Kwinana valued at $100,000.

References

{{WA Inc Political scandals in Australia Royal commissions in Western Australia Economic history of Western Australia 1980s in Western Australia