Global roundup

02 September 2002 00:00  [Source: ACN]

In Thailand, PTT signed a 15-year gas deal with ROC. Asian C2/C3 output was hit by unscheduled shutdowns of four crackers. Also during the week of 22-28 August 2002, the price of oil continued to rise as US-Iraq tensions intensified

From stories supplied by the CNI  and ACN  teams. See www.cnionline.com . For exclusive news and analysis, see the rest of ACN

BP reduces job cuts at Grangemouth

22 August. BP is to cut 700 jobs from its site at Grangemouth, Scotland, by end-2002, instead of the 1000 originally planned.

Robin McGill, chief executive of the BP Solvay Polyethylene joint venture, said that BP had redeployed more staff from the Grangemouth oil refining and petrochemicals complex than initially predicted. Of the 700 job cuts - out of a total Grangemouth staff of 2500 - 125 will come from BP Solvay Polyethylene, where two hdPE units are closing.

The remaining job custs will come from the merger of BP's petrochemicals, refining and Forties pipeline arm into one business unit.

Occidental sells C2 jv share to Lyondell

23 August. Occidental Petroleum said it had completed the sale of its 29.5% interest in cracker and PE joint venture Equistar to Lyondell Chemical, receiving 34m shares or about 21% of Lyondell in return.

Lyondell now owns 70.5% of Houston-based Equistar with Millennium Chemicals holding the remaining 29.5%.

California-based Occidental said it would, as a result, record an after-tax gain of at least US$100m in Q3.

PTT signs 15-year gas deal with ROC

23 August. The Petroleum Authority of Thailand plc (PTT) signed a deal with Rayong Olefins Co (ROC) to supply natural gas for 15 years to feed ROC's cracker at Mab Ta Phut.

The Baht750m (US$17.7m) deal initially is for PTT to supply 50-100 000 tonne/year of liquefied natural gas and 35-70 000 tonne/year of natural gas liquids to ROC's cracker which has a capacity of 800000 tonne/year of ethylene and 400 000 tonne/year of propylene.

The volume of gas available from PTT will double after the company's Unit 5 gas separation plant comes onstream in 2004.

The new agreement will come into effect early in 2003.

BP and TotalFina keen on investing in CPC

23 August. BP and French major TotalFina Elf have expressed interest in investing in Taiwan's state-owned Chinese Petroleum Corp (CPC) which is expected to be privatised by the end of next year.

A source at the Ministry of Economic Affairs (MoEA) said BP and TotalFina Elf were among a number of companies to have visited the ministry to find out more about investing in CPC.

The MoEA is responsible for spearheading CPC's privatisation programme.

CPC confirmed that it had been approached by many foreign companies, among them BP and TotalFina.

However, the company stressed that no commercial decisions had yet been made.

BP and TotalFina were not available for comment.

SembCorp, CTCI win deal for China ldPE

23 August. UK-based engineering company SembCorp Simon-Carves and Taiwanese contractor CTCI have won the race to build China's largest ldPE plant.

Simon-Carves, which was bought last year by Singapore's SembCorp, said that the contract to design, supply and build the 400 000 tonne/year plant in Nanjing had been awarded by BASF-YPC, the joint venture between BASF and Sinopec.

Although the value of the plant was not disclosed, Simon-Carves said the plant would cost approximately US$200m. It is due for completion in the first half of 2005.

Celanese restarts Singapore plant operation

Among Celanese Singapore's plants operating at reduced capacity on Jurong Island is the company's VAM facility

26 August. Celanese Singapore has restarted all its acetic acid and vinyl acetate monomer (VAM) units on Jurong Island, but is operating at reduced capacity under force majeure, according to John O'Dwyer, Celanese vice-president for acetyls.

O'Dwyer said while Celanese was now receiving carbon monoxide (CO) feedstock from supplier Singapore Syngas, Syngas had only come up with a 'temporary fix' to the problem that forced the plants to close on 12 July.

He said Celanese was uncertain whether Syngas could continue to produce CO consistently until the supplier had made a permanent fix, which might not happen until late October or early November, although the timing was subject to change. He said it would take Celanese several months to get its system back in balance, with adequate inventories in the right places.

The company has a 500 000 tonne/year acetic acid plant, a 190 000 tonne/year VAM facility and downstream ethyl and butyl acetate units.

US producers question EPA authority

26 August. The National Association of Manufacturers (NAM) questioned whether the US Environmental Protection Agency (EPA) had the authority to require chemical producers to assess their vulnerability to terrorist attacks.

Keith McCoy, NAM's director of environmental quality resources, told a conference that it supported voluntary guidelines for conducting vulnerability assessments, but not federal regulations.

EPA officials recently disclosed that the agency wanted to propose a rule requiring the assessments, but they acknowledged there was strong disagreement within the Bush administration over whether the EPA has the statutory authority to do so.

Chlorine leaks see heads roll at Spolana

26 August. Heads began to roll at Spolana after two recent chlorine leaks at the flood-afflicted Czech PVC maker.

Unipetrol, Spolana's parent company, dismissed Radomir Vek from his post as chief executive officer. He was replaced by Miroslav Kuliha, chief executive of Unipetrol's petrochemical subsidiary Chemopetrol.

Unipetrol believes Kuliha will be better able to guide Spolana out of its current crisis and manage the company's resumption of operations, scheduled for end-November.

Hundreds of kilograms of chlorine has leaked from the plant, based in Neratovice, just north of Prague, following devastating floods in central Europe.

Spolana spokesman Jan Martinek said he could not rule out further management dismissals at Spolana.

ROC's faulty C2 hits Siam Cement polymer

27 August. Siam Cement has shut two PE lines and reduced operating rates at its other plants in Mab Ta Phut , Thailand, following a force majeure declaration by Rayong Olefins Co (ROC) on ethylene supplies from its cracker.

ROC, a subsidiary of Siam Cement, shut its 800 000 tonne/year cracker on 23 August due to a compressor problem.

Thai PE, another Siam Cement subsidiary, shut two hdPE lines each of 200 000 tonne/year and 180 000 tonne/year following ROC's outage. It planned to shut its 160 000 hdPE line on 27 August.

The company had also reduced the operating rate at its 100 000 tonne/year lldPE line to 80% from 100%.

Thai PP has also cut the operating rate at its 340 000 tonne/year PP plant to 80% from 100%.

S-Oil bosses in stock manipulation case

27 August. South Korean prosecutors have brought charges against the president and chairman of S-Oil Corp, the country's third largest refinery, after detaining the two men for 20 days for questioning on allegations of stock price manipulation and doctoring financial statements.

An S-Oil spokesman said that chairman Kim Sun Dong and president Yoo Ho Kee had been indicted and would face charges which had yet to be specified.

The spokesman said the decision to indict Kim and Yoo cleared the way for the company to seek bail for the two men, who have been in custody since they were arrested by police on 31 July.

Police originally alleged that Kim and Yoo pocketed Won80.4bn (US$67.7m) in profits by inflating the company's stock price between March 2000 and May this year.

S-Oil had earlier categorically denied the police allegations saying they were based on a malicious letter sent by discontented parties.

Rigid environmental laws taken to task

27 August. Bayer criticised the use of rigid laws and unnecessary bureaucracy in setting environmental targets, such as for the reduction of greenhouse gas emissions.

Board member Udo Oels said at the World Summit on Sustainable Development in Johannesburg, South Africa, that success could only be achieved quickly if industry was able to act on its own responsibility and was free to utilise its technical expertise as it thought best.

Rigid legislation and unnecessary bureaucracy would not serve the cause of environmental protection, he said.

His comments came as Bayer reaffirmed its pledge, made after the Rio de Janeiro Earth Summit 10 years ago, to cut greenhouse gas emissions by 50% by 2010 compared to levels in 1990.

Czech president condemns Spolana leaks

27 August. Czech President Vaclav Havel called the chlorine leaks at Spolana 'difficult to defend' and questioned the wisdom of siting the major chemicals plant at a flood-prone location.

However, he expressed confidence that lessons will be learned from the police investigation into the incident.

Several hundred kilograms of chlorine escaped from the PVC maker during central Europe's worst flooding in more than a century.

Spolana's plant, which is based on the river Labe in Neratovice, north of Prague, was 90% submerged in water. Two major leaks took place on 15 and 23 August, with a further minor leak also occurring on 20 August.

Havel told reporters while there was no need for hysteria, it was a challenge to analyse the reasons why the leaks happened.

Chemical plants vulnerable to firearms

27 August. Terrorists could turn chemical plants and refineries into weapons of mass destruction by using easily obtainable conventional firearms such as a high-powered sniper rifle, according to Tom Diaz, senior policy analyst at the Washington-based Violence Policy Center.

Diaz said the 50-calibre sniper rifle and the armour-piercing ammunition it is capable of firing pose a serious threat to chemical facilities. He told a press conference the rifles and their ammunition were designed to destroy bulk fuel tanks from a distance and were easier to purchase than handguns in the US.

Officials at the American Chemistry Council were not immediately available for comment.

Since the 11 September attacks, US officials have warned of the vulnerability of the US chemical industry to possible terrorist activities.

According to the US Environmental Protection Agency, at least 123 plants in the US store amounts of toxic chemicals that could place more than 1m people in danger if released.

Singapore petchem output up 33% in July

27 August. Singapore's petrochemical output increased by 33% year-on-year in July, largely due to lower than normal production in July 2001 because of maintenance shutdowns of downstream plants, according to the Economic Development Board (EDB).

The chemicals cluster as a whole grew by 15.2% in July, leading to a cumulative growth of 9.4% in the first seven months of the year compared to the same period in 2001.

Output of industrial and speciality products continued to shine in July, increasing by 11.8% in July in response to sustained demand from regional markets, while there was also a higher output of naphtha to meet demand, the EDB said.

Overall manufacturing output grew by 17.8% year-on-year in July this year.

War talk sends oil prices soaring

28 August. Renewed talk of a US assault on Iraq sent world oil prices to their highest level in a year. London benchmark Brent crude futures rose by 78 cents to US$27.77/bbl, catching up with the US market's jump of 65 cents on 27 August.

In Asia, fuel oil prices rose to a 22-month high on concern that any US attack on Iraq would disrupt fuel supplies from the Middle East at a time when Asian refiners have cut output.

The price rise followed the US government's most forceful rationale yet for attacking Iraq, issued by US vice-president Dick Cheney.

Warning that Saddam Hussein would soon have nuclear weapons, Cheney said Saddam would seek domination of the entire Middle East, take control of a great portion of the world's energy supplies, directly threaten US allies throughout the region and subject the US or any other nation to nuclear blackmail.

Mitsui Chem ramping up C2 capacity

28 August. Mitsui Chemicals is ramping up capacity at its 612 000 tonne/year cracker in Chiba after restarting it on Monday (26 August). The cracker was shut on Friday (23 August) owing to a technical hitch.

The company said it would try and build up the operating rate of the cracker to 95% in the next couple of days.

It added that supplies to its customers would not be affected by the temporary interruption to production, as the company had sufficient inventory.

Nufarm buys Orica/Incitec Crop Care

28 August.Australia's Nufarm reached agreement to acquire Crop Care Australasia for Aus$75m (US$41.4m) from chemical and explosives producer Orica and its fertiliser and pesticides subsidiary Incitec.

Nufarm said the acquisition was subject to clearance by the Australian Competition and Consumer Commission.

Crop Care Australasia manufactures and supplies crop protection products for both the Australian and New Zealand markets, and a number of export markets.

The business generates revenues of some Aus$140m annually.

Orica confirmed last month that it was in talks with Nufarm that were aimed at rationalising the agricultural chemical industry in Australia.

CPC to restart cracker

28 August. Chinese Petroleum Corp (CPC) plans to restart its 500 000 tonne/year No 5 cracker in Kaohsiung on 29 August after an unplanned shutdown.

CPC shut its cracker on 14 August to resolve a compressor problem.

A company source said repair work had been completed and although the cracker was unlikely to start running at 100% immediately, the company would be able to resume feedstock supplies to customers straight away.

Its customers include monoethylene glycol producers Oriental Union Chemical Corp and China Man-Made Fiber Corp.

India's RIL raises IPCL stake to 46%

28 August. Reliance Industries Ltd (RIL) has increased its stake in Indian Petrochemicals Corp Ltd (IPCL) to 46% from 26% after concluding a buyback of 49.6bn shares at Rs231/share from various investors.

RIL will invest Rs11.47bn in the buyback plan. This will take its total investment in IPCL to Rs26.38bn which includes the Rs14.91 paid to the government for the initial 26% stake in the company.

RIL won its bid of Rs14.9bn for a 26% stake in IPCL and a controlling interest on 18 May, beating off rival bids from the Indian Oil Corp (IOC) and Nirma Chemical Works.

RIL offered Rs231/share as against IOC's Rs128/share and Nirma's Rs110/share.

Atofina to cut 1300 jobs

28 August.Atofina admitted that it intended to cut its workforce by around 1300 in France over the next three years as part of plans to improve competitiveness, efficiency and safety.

An Atofina spokeswoman said the cutbacks would be made by asking employees to take voluntary early retirement. She said some employees might be transferred to other jobs at the same site or nearby facilities.

Atofina was unable to immediately identify the sites affected.

India court seeks to extradite Carbide boss

29 August. An Indian court is seeking the extradition of former Union Carbide chairman Warren Anderson for his role in the 1984 Bhopal gas disaster, and has ordered the Central Bureau of Investigation (CBI) to ensure that Anderson be brought before the court at its next hearing on 17-18 October.

The Chief Judicial Magistrate of Bhopal rejected a plea by the CBI to reduce charges against Anderson to committing hurt by negligence from a charge of culpable homicide.

The culpable homicide charge carries a sentence of up to 10 years in jail, while the negligence charge carries a maximum of up to two year's imprisonment or a fine, or both.

Anderson's current whereabouts is unknown, although it is believed he is in the US.

The disaster, on 2 December 1984, killed 4000 people within hours of the leakage and the death toll is estimated to have risen to 14 410 in the years that followed as those affected by the leak fell sick and died.

Removal of EPL sought

29 August. Thailand's Official Receiver has petitioned the Central Bankruptcy Court to remove Effective Planners Ltd (EPL) as the plan administrator of Thai Petrochemical Industry (TPI), an action taken in response to a request by former TPI chief executive Prachai Leophairatana.

This is the latest of more than 35 law suits initiated by Prachai since he was removed by TPI creditors at the end of 2000 and replaced by EPL. Prachai has lost all of the cases that have been heard to date.

Prachai has called for EPL's removal on the grounds that the administrator has not been able to meet the deadline for the sale of $200m in non-core assets to pay off part of TPI's debt.

LG Petchem to restart 760 ktpa cracker

29 August. LG Petrochemical is preparing to restart its 760000 tonne/year cracker and downstream plants at Yeochon, South Korea, after a power disruption led to an unplanned shut down late on 28 August.

The power outage caused the propylene compressor to trip automatically, forcing the company to shut the cracker and its downstream units.

These include 265 000 tonne/year of hdPE, 200 000 tonne/year of benzene, 85 000 tonne/year of toluene and 42000 tonne/year of xylenes.

Orica to merge with Pivot fertiliser assets

29 August. Australian explosives, fertiliser and plastics major Orica is to merge the fertiliser assets of its 77%-owned subsidiary Incitec with Pivot to create a new company with potential annual revenue of about Aus$1bn (US$551m).

Orica managing director Malcolm Broomhead said, subject to approvals, the merger would create a new public company, Incitec Pivot which would operate an integrated fertiliser business throughout eastern and southern Australia.

Incitec Pivot would have more than 800 employees and annual fertiliser sales of more than 3m tonne.

Broomhead also announced Orica's intention to purchase Incitec's industrial chemicals assets comprising explosives and chemicals manufacture and chemicals handling at Brisbane, Newcastle and Port Kembla for Aus$315m.

The net cost to Orica of acquiring the 23% share it does not already own through its current Incitec holding will be about Aus$73m.

Asian results

Formosa Plastics Corp (FPC) posted a 44.5% increase in operating profit to NT$3bn (US$86.3m) for the first six months of its financial year to 30 June 2002 from NT$2bn in H1 last year on higher sales volumes and product prices, the company said on Wednesday.

The affiliate of the Formosa Plastics Group also saw a 5.1% rise in sales to NT$31.4bn from NT$30bn last year.

The company's et profit was up by 5.6% to NT$5.4bn from NT$5.1bn. The net profit was considerably higher than FPC's operating profit because of substantial gains from non-operating income and lower non-operating expenses.

FPC gained NT$500m from the sale of fixed assets during H1 2002, compared with just NT$2m last year.

The company also gained NT$701.6m from the sale of investments and NT$117.3m from foreign exchange transactions.

Taiwan Styrene Monomer Corp (TSMC) registered an operating profit of NT$632.3m for the first six months of its financial year to 30 June 2002 compared with an operating loss of NT$218.7m last year, mainly due to higher product prices, the company said on Thursday.

Net profit also turned around to NT$489.3m compared with a net loss of NT$106.23m in H1 last year on the back of higher prices. 

TSMC boosted its sales to NT$3.5bn in H1 2002 - 41.2% higher than last year's NT$2.5bn.

Nan Ya Plastics posted a 72.7% rise in net profit to NT$9bn for H1 2002 from last year's NT$5.2bn on improved electronic chemicals, polyester and plastics prices.

Turnover in H1 2002 rose to NT$50.3bn, 3.2% higher than last year's NT$48.7bn.

Nan Ya benefited from substantial increases in its non-operating income, partly due to the sale of fixed assets worth NT$889.8m in H1 2002 compared to the sale of just NT$43.5m in assets in H1 2001.

Formosa Chemical & Fibre Corp (FCFC) reported a 36.8% increase in net profit to NT$4.9bn for the first six months of its fiscal year to 30 June 2002 from NT$3.6bn due to higher product prices and sales volumes.

FCFC's turnover rose by 12.2% to NT$38.28bn from NT$34.1bn while operating profit was NT$3.2bn - 47.7% up on the NT$2.1bn in H1 2001.

Its net profit was higher than operating profit due to gains from non-operating income and lower losses on non-operating expenses.

Jilin Chemical Industrial Co (JCIC) said its first half loss narrowed to Rmb350m (US$42m) from a loss of Rmb660.7m during the same period a year ago on cost- cutting measures.

JCIC's first half loss/share for H1 2002 was Rmb10 - down from Rmb19 in 2001.

Turnover for the six months decreased by 24.4% to Rmb4.5bn. Sales of petrochemical products, which accounted for almost half of the company's turnover, decreased by 15.6% to Rmb2.2bn.

Yangzi Petrochemical posted a 42% increase in operating profit to Rmb6.57bn for the first six months of its fiscal year to 30 June 2002 from Rmb4.64bn due to lower feedstock costs.

The Sinopec subsidiary also saw a 63.9% rise in net profit during H1 2002 to Rmb258.7m from Rmb157.8m in the same period of 2001. Core revenue fell slightly by 8.6% to Rmb66.1bn from Rmb72.3bn.

Yangzi said the lower revenue recorded this year was a result of lower product prices.

The company added that lower crude oil prices following 11 September were partly responsible for its improved operating profit.

Qilu Petrochemical recorded a net loss of Rmb199m for the first six months of its financial year to 30 June 2002 compared to a net profit of Rmb94.7m in H1 last year due to lower output and product prices.

The Sinopec subsidiary saw a 21.9% drop in its core revenue to Rmb2.8bn from Rmb3.6bn last year.

Operating profit also fell by 83.7% to Rmb44.4m from Rmb272.4m last year.

The company said the reason for the net loss and lower operating profit were lower output from its plants due to a routine turnaround and lower product prices.

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