Global roundup

13 September 2004 00:01  [Source: ACN]

A huge bomb explosion rocked Jakarta, killing at least six people and badly damaging the Australian embassy, and another typhoon and two earthquakes hit Japan in the week 3-9 September. And approval was given for China’s biggest methanol project, while India and Asean delayed their planned tariff cuts

From stories supplied by the CNI and ACN teams.

IFC mulls $100m loan for Copesul

3 September. International Finance Corp’s (IFC’s) board of directors is scheduled to consider a proposal on 28 September to lend US$100m to Companhia Petroquimica do Sul SA (Copesul).

The proposed loan would help fund a US$150m investment that Copesul has planned in 2004-2006 to improve its operational efficiency and productivity.

Fire at Idemitsu’s refinery

3 September. A fire broke out at Idemitsu Kosan’s Tomakomai city refinery on the northern Japanese island of Hokkaido early today as the company attempted to restart a fluid catalytic cracking (FCC) unit at the site.

A company official said a small fire broke out around the FCC unit and not inside of it, leaving no major damage. He said the fire was extinguished and the local fire department was investigating. The company had no clear idea when it could restart the FCC unit.

CPC eyes Saudi C2 jv

3 September. Chinese Petroleum Corp (CPC) was eyeing a US$3.5bn cracker joint-venture project with Sabic, a company official said.

CPC was considering building a 1.2m tonne/year cracker in Saudi Arabia, with the aim of securing cheaper feedstocks, he said.

Based on current market trends, CPC could either invest in areas to secure cheaper feedstocks or else secure greater market share for its downstream products, the official said. ‘CPC will choose the first option because the second option is not available to us.’

BP shuts ultraformer

3 September. BP has closed an 80 000 bbl/day ultraformer at its 550 000 bbl/day Texas city, Texas, US, refinery after an accident in which three workers were injured.

BP spokesman Scott Bean confirmed that three employees suffered burns from scalding water as they were working on a steam line. He said two were in serious condition at a hospital.He would not discuss the accident’s impact on production. An ultraformer produces blending components that boost octane in gasoline.

C Asri to reduce workforce

3 September. Chandra Asri is expected to trim its 1000-strong workforce in a few months’ time, company officials said.

One official expected the company to cut as much as 20% of its workforce as part of its restructuring plan. ‘The company is making money now because of the high cracking margins, but the shareholders were talking about the restructuring plan a long time ago,’ he said. The shareholders of Chandra Asri are Singapore-based Glazers & Putnam Investment and Chandra Asri’s former head, Prajogo Pangestu, who holds his stake through investment company Inter Petrindo Inti Citra. A stake is also held by Marubeni.

Typhoon, quakes hit Japan

5 September. Typhoon Songda – the third typhoon to hit the country in a week – is raging through Japan’s southern extremities, with waves hitting coastal roads, disrupting transport and stranding holidaymakers.

At least 12 people were injured in the storm in Okinawa and Kagoshima regions.

Meanwhile, two earthquakes off the west coast were felt in Tokyo and sent tremors through other major cities.

Coastal areas close to the quakes, which happened five hours apart, were ordered evacuated amid reports of tidal waves approaching from the Pacific Ocean.

NSC restarts petchem operations

6 September. Nippon Steel Chemical (NSC) has restarted operations at its petrochemicals complex in Oita, southern Japan, after shutting for almost a week because of a typhoon.

Operations at the complex were restarted on 4 September after the successful restart of Showa Denko’s neighbouring cracker on 1 September, a company official said.

Incitec Pivot signs 10-year gas deals

6 September. Incitec Pivot signed three ten-year natural-gas supply and transport deals today to secure a long-term gas supply for its fertiliser manufacturing plants on Gibson Island in Brisbane, Australia. Natural gas is the key feedstock for Incitec Pivot’s production of ammonia, urea and ammonium sulphate fertilisers.

The company signed agreements with Origin Energy CSG Marketing and Queensland Gas Co, together with Pangaea Oil and Gas, for the supply of about 150 petajoules of gas over ten years.

Shinkong plans new yarn unit

6 September. Shinkong Synthetic Fibres plans to add a new 60-70 tonne/day industrial-purpose yarn (IPY) unit to its Huachun complex in Zhejiang province, China, by end-2005, a company official said.

The company currently produces 100 tonne/day (330 000 tonne/year) of partially oriented yarn and 27 600 tonne/year of drawn twisted yarn in Huachun.Apart from the IPY project, the company was expected to bring onstream a 10 000 tonne/year amorphous-polyethylene terephthalate sheet unit in the first quarter of 2005, with construction work set to be completed by the end of this year, the official said.The company’s new 18 000 tonne/year engineering plastics unit would come onstream soon afterwards in the second quarter of 2005.Shinkong planned to source the raw materials for the projects from its Taiwanese plants, but it would not rule out using domestic supplies if the costs were lower, the official said.

SCC offer not likely to end in takeover

6 September. Siam Cement Co’s (SCC’s) tender offer for all outstanding shares of Thai Plastic and Chemicals (TPC), which closes at the end of business today, is unlikely to give the conglomerate total control of the polyvinyl chloride maker.

A source close to the bid noted that TPC had been trading at above SCC’s offered price of Baht180/share (US$4.33) for most of the tender-offer period, meaning that few of TPC’s other investors were likely to sell their shares to SCC.SCC had to launch the tender offer after it acquired more than 50% of TPC in mid-June. It had bought a 10.16% stake from a local affiliate of Asahi Kasei Chemicals, raising the total shareholding of SCC and its affiliates to 57.22% and triggering a mandatory takeover bid.

Shinkong delays PET start-up

6 September. Shinkong Synthetic Fibres has pushed back the start-up date for its 12 000 tonne/year polyethylene terephthalate (PET) film-grade project in Taoyuan, Taiwan, to end-2005 from mid-2005, a company official said.

The company had already sealed design and engineering agreements with the contractors, he said. The delay was partly becauseof the extra time needed to secure contractors for the NT$2bn (US$59m) project, the official said. 

Agic to raise Asian PIA price

6 September. AG International Chemical (Agic) plans to raise its purified isophthalic acid (PIA) price by US$200/tonne on 1 October for Asian customers, the company said.

The company said the planned increase was due to the high cost of xylene feedstock and other cost increases, the wide price gap between Asia and the rest of the world, and the bullish PIA market outlook for the near term.The Asian price is pegged at $1000–$1050/tonne, compared with $1200/tonne in Europe and the US.

Thailand to phase out MTBE use

6 September. Thailand’s imports of methyl tertiary butyl ether (MTBE) are set to be phased out by the end of 2006, as the country switches to the more environmental-friendly ethanol for fuel blending.

An official with the country’s natural-gas monopoly, PTT Pcl, which owns about a third of the country’s refining capacity as well as a number of major petrochemical producers, said that Thai refiners would be reducing their MTBE use over the next two years.

The country currently imported about 200m l/year, she said.

EC nod for Petroplus acquisition

6 September. Global private equity group Carlyle said that its planned acquisition of Dutch oil refiner and petrochemical products marketer Petroplus has been cleared by the European Commission.

The Euro247m (US$298m) cash offer for Petroplus has been made by RIVR Acquisition BV, a consortium of funds linked to the Carlyle Group.

BPI H1 pre-tax profit down 12.7%

6 September. British Polythene Industries (BPI) blamed difficult trading conditions and continuing rises in raw-material costs for a 12.7% slump to £7.1m (US$12.6m) in first-half pre-tax profit and warned that full-year earnings would be significantly below last year’s.

Operating profit was down 11.1% to £8.8m compared with January–June last year on sales virtually unchanged at £189m.

Nampak evaluates PE imports

6 September. South African plastics manufacturer Nampak said it was evaluating plans to import polyethylene (PE) because of potential supply disruptions after Sasol’s ethylene plant accident last week.

Nampak’s contingency plan for the import of PE is one of the first signs of supply disruptions since the explosion at an ethylene plant at Sasol’s synthetic fuels complex in Secunda

Topsoe wins Romanian plant deal

6 September. Haldor Topsoe said it had won a contract from SK Engineering & Construction to supply engineering, catalyst, equipment, materials and site supervision for a spent sulphuric acid regeneration plant in Romania.

The plant, being built for Romanian oil group Petrom’s Petrobrazi refinery, will process about 100 tonne/day (about 330 000 tonne/year) of spent sulphuric acid from an alkylation plant. It is due to come onstream in 2006. In addition, Topsoe said it had signed a three-party licence and basic-design agreement with Petrom and SK Engineering & Construction.

Sasol’s C2 splitter unaffected by blast

6 September. Sasol’s 170 000 tonne/year ethylene splitter was unaffected by last week’s fatal explosion at the synthetic fuels complex in Secunda, South Africa, a spokesman for the South African energy and petrochemicals firm said.

The blast occurred on 1 September and the death toll reached seven today.‘The explosion was at the Secunda cracker during its maintenance shutdown,’ the spokesman said. ‘The ethylene splitter [at Secunda] and the cracker in Sasolburg are not affected by the explosion.’ Sasol’s monomers business operates two ethylene crackers, one in Sasolburg and the other in Secunda. The Sasolburg cracker is rated by Sasol at about 70 000 tonne/year and it puts the damaged Secunda cracker’s capacity at about 200 000 tonne/year. 

The firm also has an ethylene splitter in Secunda that operates independently of the cracker.

Bayer to up Euro MDI, TDI prices

6 September. Bayer announced plans to raise prices for key polyurethane (PU) raw materials in response to strong demand plus the need to recoup surging feedstock and energy costs, and justify investment in new capacity.

The company said it planned to increase European prices of methyl di-p-phenylene isocyanate (MDI), toluene di-isocyanate TDI), polyether and polyol systems from 1 September.

Customers will be faced with a rise of Euro200 (US$164)/tonne for MDI; Euro140/tonne for TDI, and Euro100/tonne for polyether and polyol systems.

Russian govt under pressure over siege

7 September. Families in Beslan, Russia, are facing a third day burying their dead as the Russian government comes under growing pressure over its handling of the school siege.

France’s prime minister has joined calls by Russian papers for answers amid concern the authorities tried to play down the scale of the tragedy.

At least 335 people, half of them children, died in the bloody siege and a further 200 are unaccounted for.

More than 100 000 people are expected to attend a rally promoted by the government outside the Kremlin today to condemn terrorism.

But there is also rising concern about the exact events that led to Russian special forces storming the school on 3 September.

France’s prime minister, Jean-Pierre Raffarin, while expressing solidarity with Russia, said he wanted all the necessary information about what had happened.

IOC to decide petchem product slate

7 September. Indian Oil Corp (IOC) will soon work out the broad contours of its petrochemicals complex, which is to be set up downstream from its proposed Paradip refinery at Abhayachandrapur in Orissa, India.

The complex is expected to produce ethylene and styrene as well as polymers such as acrylonitrile butadiene styrene and aromatics such as benzene and paraxylene.

An IOC official said the petrochemical configuration would be decided only after the company had made its mind up about the crude-processing capacity of the refinery.

The company is debating whether the capacity should be 15m tonne/year or 9m tonne/year.

MBA eyes China, Europe jvs

7 September. MBA Polymers is planning joint ventures in China and Europe to produce engineering polymer resins from scrapped computers and other plastic-bodied equipment.

The company has incorporated a joint venture with Guangzhou Iron and Steel Enterprises (GISE) to set up a 40 000 tonne/year polymer plant in the Nansha Development Area of Guangzhou, China. The cost of the project is estimated at US$14m. It has a 55% equity stake in the joint venture, named GISE-MBA New Plastics Technology Co (GMP), with a 45% stake being held by GISE.

MBA has approached the International Finance Corp (IFC) to invest US$1.2m in GMP’s equity. The IFC board is scheduled to consider MBA’s application on 4 October. MBA is also planning to set up a second joint venture in China, which may be located in the northern region of the country.

ROC enjoys healthy margins

7 September. Rayong Olefins Co (ROC) is making a healthy cracking margin of about 30% despite selling its entire ethylene and propylene in the domestic market, a company official said.

The 800 000 tonne/year naphtha cracker in Mab Ta Phut, Thailand, supplies to five downstream affiliated companies in the country.

‘Even though the spot prices for ethylene and propylene are a lot higher than the domestic prices, we still have a good margin,’ the official said. Asian ethylene prices hit a record high of US$1350-1400/tonne fob Southeast Asia late last week.

ROC expected ethylene prices to remain high at least until the end of this year, considering the strong regional demand, the official said.

Petchems unscathed by typhoon

7 September. Japan’s petrochemical majors have managed to escape the impact of Typhoon Songda for the time being, with all companies in southern Japan reporting normal operations today.

The typhoon made landfall on the southern Japanese island of Kyushu, packing winds of 140 km/h, and posed a new threat to several petrochemical complexes, some of which were only just recovering from shutdowns caused by Typhoon Chaba at the end of August.

Mitsubishi Chemical reported that its complex in Kurosaki, Fukuoka prefecture, in northern Kyushu, had been unaffected by the typhoon. Mitsui Chemicals’ complex in Omuta continued to operate normally despite the fact that the tropical storm passed almost overhead.

Sumitomo Chemical reported that its complex at Niihama in Ehime prefecture was operating normally, as did Ube Industries, headquartered in Ube City, Yamaguchi prefecture.

Oita-based Showa Denko and Nippon Steel Chemical reported normal operations, largely because the latest typhoon was carrying less torrential rain, which caused the August shutdowns, although its winds of up to 140 km/h were far stronger.

Sabic to build up C2 stocks

7 September. Sabic will focus on building up its ethylene inventories and maintaining steady supplies to its downstream units in the Middle East and Europe after starting up its 1m tonne/year Al-Jubail cracker earlier than expected recently, a company official said.

The 100% Sabic-owned cracker, operated by its subsidiary, Jubail United Petrochemical, was started up a few weeks ago, and was producing on-spec ethylene.Sabic was trying to bring forward the commissioning date for the cracker to September from the original target date in October because of the current tight supply for ethylene and strong petrochemical demand, he added.

Mitsubishi to spin off nitrates, NH3

7 September. Mitsubishi Chemical is to sell a number of plants located at its complex in Kurosaki, Fukuoka prefecture, Japan, to subsidiary Nippon Kasei for Yen3bn (US$27.3m), a Mitsubishi spokesman said.

The spokesman said the plants produced nitric acid, ammonium nitrate, sodium nitrate and urea. He would not reveal the plants’ capacities.

Nippon Kasei, which is 52.89%-owned by Mitsubishi, has its own complex in Niihama in Ehime prefecture, which also has nitrates and ammonia plants. Details of the company’s plants and their capacities were not available.

Sasol to import PE from Malaysia

7 September. Sasol said it would import polyethylene (PE) from its operations in Malaysia to cover potential supply shortages caused by last week’s explosion at its Secunda, South Africa, ethylene cracker.

‘We have notified our Malaysian operations that there will be a nominal tonnage requirement which they can supply in the next one to two weeks,’ Trevor Munday, Sasol’s group director of chemicals and chief financial officer, said. 

Sasol Polymers has shares in the Optimal Olefins gas cracker and the Petlin PE plant in Kertih, Malaysia.

Huntsman nod for UK PE unit

7 September. Huntsman gave the go-head today for plans to build a 400 000 tonne/year polyethylene (PE) plant on Teesside, northeast England, at a cost of about £200m (US$355m).

Due onstream in the third quarter of 2007, it will be the world’s largest low-density polyethylene plant, according to Huntsman.

President and chief executive Peter Huntsman gave the go-ahead after receiving confirmation that the project would receive a £16.5m UK government grant under the regional selective assistance scheme.

India, Asean delay tariff cuts

7 September. India and the Association of Southeast Asian Nations (Asean) are to delay planned tariff reductions on specified chemicals and other products after setbacks in trade talks. 

India now expects the import duty cuts to be effective by January 2005 and not 1 November 2004 as had been originally specified under the early harvest programme (EHP) incorporated in the Framework Agreement on Comprehensive Economic Cooperation signed by India and Asean in October 2003.

Neither side has yet disclosed the percentage reduction in tariffs that they have offered to each other under the EHP. The programme is the first step towards achieving the long-term objective of forming an India-Asean Regional Trade and Investment Area, which would include a free-trade agreement.

The EHP list includes: benzene, paraxylene, phthalic anhydride, monomethyl ethers of ethylene glycol or of diethylene glycol, cyclic polymers of aldehydes, esters of methacrylic acid, nitrites, iodides and iodide oxides, calcium carbonate, sorbitol, quinol and its salts, benzoic acid, its salts and esters’ amino-alcohol-phenols, acyclic amides and specified group of dyes.

6 die in Jakarta bomb blast

9 September. At least six people have been killed and scores injured after a huge bomb exploded outside the Australian embassy in the Indonesian capital of Jakarta this morning.

Police have confirmed the blast that rocked the central business and embassy district at 10.15 local time (0415 GMT) was caused by a truck bomb at the gates of the embassy.

Australian Foreign Minister Alexander Downer said it was clearly a terrorist act aimed at Australia. Some locally employed staff at the embassy have reportedly been killed or injured. The Foreign Affairs Department in Canberra said all Australian staff at the embassy had been accounted for.

The gates of the embassy were badly damaged. However, the building itself – a low-rise structure on a mound – was built to withstand bomb attacks.

The explosion in Rasuna Said Street could be heard 5 km away and shattered hundreds of windows in nearby office blocks.

The 70-strong staff at Mitsubishi Chemical Indonesia, which has its offices on the seventh floor of the Setiabudi office block right opposite the Australian embassy, were evacuated immediately after the blast and were later sent home for the day.

Nod for biggest methanol project

9 September. China’s State Development and Reform Commission has approved the construction of an 850 000 tonne/year methanol facility planned by Mitsubishi Gas Chemical (MGC) and a Chinese partner in Chongqing in southwest China.

An MGC spokesman said the company and local partner Chongqing Chemical & Pharmaceutical Holdings had agreed to form a joint venture to build the project in the first half of 2005.

The project, which will be the largest methanol facility in China, is scheduled to come onstream in the first half of 2007.

MGC will take a 51% stake in the project, while Chongqing Chemical will take the balance of the shares. The companies did not reveal the cost of the project.

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