The week in brief

The world this week

14 December 2009 00:00  [Source: ICB]

SHELL KEEN ON POSSIBLE SINGAPORE LPG TERMINAL
Energy giant Shell is interested in the construction of a liquefied petroleum gas (LPG) terminal in Singapore, where its major petrochemical hub is located. "We are actively looking at how we can make that work and I'm sure there are multiple roles that we can play in that sort of development," said Shell Chemicals' executive vice president, Ben van Beurden, in an interview on the sidelines of the 4th Gulf Petrochemicals and Chemicals Association (GPCA) summit in Dubai. One possibility was that The Polyolefin Company (Singapore), in which Shell and partner Qatar Petroleum Investment have a joint 30% stake, would be among the customers of such an arrangement, while the Qataris would become the suppliers, said van Beurden.

SAUDI TO NAME JIZAN PROJECT WINNING BIDDER
The Saudi Arabian government plans to announce the winning bidder for the proposed Jizan refinery before the end of this year. Ali Al-Naimi, Saudi Arabian minister of petroleum and mineral resources, confirmed the news in his keynote address at the 4th Gulf Petrochemicals and Chemicals Association (GPCA) summit. Malaysian state-owned oil major Petronas and Saudi Arabian Tasnee Petrochemicals are among the four companies bidding for a stake in the Jizan refinery project. The proposed crude refinery would have a capacity of up to 400,000 bbl/day.

CROATIAN PROSECUTORS EXAMINE MOL/INA DEAL
Croatian prosecutors are examining the deal that awarded the management control of Croatian oil company INA to Hungarian oil, gas and petrochemical group MOL, the Croatian State Prosecutor's Office (DORH) said last week. The deal would be reviewed "to determine if concluding the contracts may have been detrimental for Croatia," DORH said on its website. The office said it had decided to go public with its inquiries, which began in November, after Croatian President Stjepan Mesic said earlier last week that prosecutors should look at the relevant contracts to see why MOL, which owns 47.2% of INA, was granted full management rights over the firm in January.

DOW CHEMICAL'S POLYOLS PROJECT COMPLETED
Dow Chemical has completed an expansion of its polyols site at Terneuzen in the Netherlands, the US chemical producer said last week. The increased capacity was to provide for customers in Europe, as well as growing regions such as India, the Middle East and Africa. "We anticipate increased demand for polyols as the global economy recovers, and this investment continues to ensure we have a reliable supply of essential products from the Terneuzen site," said Dow Polyurethanes' vice president Guillermo Novo. The company said that the expansion increased polyols capacity at the plants by 180,000 tonnes/year, but it would not disclose the total nameplate capacity of the plant.

KIRI DYES AND CHEMICALS ACQUIRES DYSTAR
Indian company Kiri Dyes and Chemicals has agreed to buy insolvent German textiles and leather-chemicals producer DyStar. The acquisition, through a Singapore-based Kiri affiliate, included DyStar Group and its selective assets, said Kiri in a filing with the Bombay Stock Exchange. DyStar's core business will remain unchanged after the acquisition. Kiri added that it would seek to normalize DyStar's production facilities in Germany over the next few weeks. Financial terms or other details were not disclosed.

MONSANTO ON TRACK TO REACH 2012 TARGETS
Monsanto's president and CEO, Hugh Grant, says the US agricultural and biotechnology major is on track to reach its 2012 financial commitments. Grant was expected to say that preview yield results due to be released later at the American Seed Trade Association annual conference would be promising indicators for 2010 and the path toward 2012. "What we are seeing in our yield results this year tells me we are off to a great start in reaching the goals we've set for our company. As farmers experience the superior performance and profitability on their farms we are confident they will be compelled to upgrade to our latest technology," he said.

CHINA'S NDRC APPROVES YANTAI WANHUA'S PLANTS
China's National Development and Reform Commission (NDRC) has approved Yantai Wanhua Polyurethanes Co's plan to build 11 new chemical plants at Bajiao Lingang Industry Park of Yantai, eastern Shandong province. "NDRC granted the approval on December 7 and we will make preparatory work to kick off the construction as soon as possible after getting approval from the company's general meeting of shareholders," a company source said. The company will invest a total of yuan (CNY) 13.2bn ($1.93bn) to build the new plants along with other public utilities. The plants will include a 600,000 tonne/year methyl di-p-phenylene isocyanate (MDI) plant and a 300,000 tonne/year toluene di-isocyanate (TDI) unit.

CHINA'S PARAFFIN WAX EXPORTS FALL BY 40%
Exports of fully refined 58/60ºC paraffin wax from China fell by 40% to 32,120 tonnes in October from September due to poor demand amid a seasonal lull, said market sources last week. Exports were largely stable compared to the same period last year, where 32,506 tonnes were exported, according to statistics from China Customs. Exports of paraffin wax are typically higher in September as compared to other months because of the peak manufacturing season of candles before Christmas in Europe and the US, industry participants said. China exported 53,861 tonnes of paraffin wax in September 2009.

HYDROGEN PLANT EXPLODES IN TEXAS
An explosion and fire last week at an internal hydrogen plant shut down the Praxair-run facility within Motiva Enterprises' 285,000 bbl/day Port Arthur refinery in Texas, US, according to sources. A hydrogen plant operated by Praxair within the refinery "experienced an energy release at approximately 10:20 am," a statement from Shell Oil detailed. Motiva is a joint venture with Shell Oil, an affiliate of Royal Dutch Shell, and Saudi Refining, a subsidiary of Aramco Services. "It has been confirmed that all Motiva personnel have been accounted for, with no injuries to Motiva employees," the statement said.

EXXONMOBIL IS OPEN TO CHINA AND MIDDLE EAST
Energy giant ExxonMobil remains on the lookout for more projects in China and the Middle East - markets that are vital to the group's overall business strategy, a company executive said last week. The strong demand from China and the emergence of the Middle East as the biggest net exporter of petrochemical products in the world make further investments appealing, ExxonMobil Chemical president Stephen Pryor told ICIS news in an interview.

NEED FOR BIG CROPS TO FUEL FERTILIZER UPTURN
The world's need for higher crop yields and more acreage to supply food and fuel will power an upturn for the fertilizer industry in 2010 and beyond, said US fertilizer maker Mosaic last week. A revival of global economic growth and the increased use of grains and oilseeds for food and biofuels will spur greater use of fertilizers, Mosaic CEO Jim Prokopanko said.

CHEMTURA, AL-ZAMIL ADVANCE SAUDI PROJECT
US specialty chemicals producer Chemtura and partner Al-Zamil Group have completed front-end engineering and design for their planned worldscale metal alkyls joint venture project at Jubail Industrial City, Saudi Arabia. In a next step, the companies are working on financing and on contracting detailed engineering and construction for the plant, which could become operational in 2012.

NE ENGLAND'S CHEMS SHARES £60M GRANT
North east England's chemical industry is set to benefit from a £60m ($97.7m, €66.3m) government investment to stimulate manufacturing in Teesside, the North East Process Industry Cluster (NEPIC) says. Up to £20m would be invested in the nearby Wilton International site, which has suffered closures and job cuts in recent months, NEPIC said. It also announced that the government's investment included a substantial package in support of the process sector's 10 point action plan on how to tackle the immediate and long-term challenges facing Teesside's chemicals industry.

BAYER AND DOW AGREE BIODIESEL TECH DEAL
Bayer and Dow Chemical have signed a licensing agreement for the worldwide marketing of Bayer's new biodiesel production technology. Developed by Bayer Technology Services, BayFAME is a continuous process for the esterification of free fatty acids (FFA) to biodiesel based on Dow's AMBERLYST BD20 catalyst. With the technology, producers will be able, for the first time, to turn any FFA-containing feedstock into fatty acid methylester (FAME biodiesel) - without worrying about yield loss, acids and waste, they claim.

INDIA'S RELIANCE LINES UP LOAN FOR LYONDELL
Indian major Reliance Industries is talking to several banks to line up an $8bn-10bn (€5bn-7bn) loan to acquire a controlling stake in petrochemical major LyondellBasell Industries, the country's Economic Times reported last week. Standard Chartered, Barclays Capital, HSBC and some French banks are among those in talks with Reliance, it reported, quoting bankers with knowledge of the negotiations. The lead financier would likely be JP Morgan, the newspaper said. LyondellBasell had previously said it received a preliminary, nonbinding offer from Reliance. The company has yet to make a final offer.

LYONDELL TO PROPOSE $300M SETTLEMENT
LyondellBasell Industries plans to propose a $300m (€201m) cash payment to partially settle a lawsuit filed by unsecured creditors, an offer that would remove significant hurdles in the company's emergence from bankruptcy protection. If approved by the bankruptcy court, the settlement would resolve claims filed against the lenders connected to Lyondell Chemical's merger with Basell, said David Harpole, company spokesman. However, claims against corporate parent Access Industries and former directors and executives would remain pending.

MIDDLE EAST PETCHEM OUTPUT "TO SURGE 85%"
Petrochemical capacity in the Middle East is projected to jump by 85% to 115m tonnes/year by 2015, taking into account the projects currently under construction, according to the Gulf Petrochemicals & Chemicals Association (GPCA). The 53m tonne/year increase would give the region a 16% share of global petrochemical capacity, said Abdulwahab Al-Sadoun, secretary general of the GPCA. "Considering the timeframe, this is significant by international standards," said Al-Sadoun. Currently, the Middle East has an 11% share of the global petrochemical capacity of 550m tonnes/year, he said. Industry leaders at the 4th GPCA forum in Dubai feared the expected jump in capacity next year while demand is still weak.

SPECIALTIES/DISTRIBUTION ARE KEY TO BOROUGE
Plastics major Borouge will continue to focus on specialty grades and expand its distribution network as part of its strategy to remain close to its customer base, William Yau, CEO of the company's marketing arm, told ICIS. "We are not interested in being a me-too resin producer. And we have our own Borstar technology to back up our specialty focus, which we will continue to fine-tune to bring better products to our customers," Yau said in an interview on the sidelines of the Gulf Petrochemicals and Chemicals Association (GPCA) forum in Dubai. Demand is expected to remain strong in the key China and India markets, he said.

GERMANY'S CHEMICAL PRODUCTION TO GROW 5%
Germany's chemical production is expected to grow by 5% in 2010, after one of the most difficult years in the history of the industry, the country's producers' association, VCI, says. Confidence has returned and companies are hoping for better business, Frankfurt-based Verband der Chemischen Industrie (VCI) said. The increase next year follows a 10% decline in production in 2009, compared with 2008. "We are emerging from a deep crisis," VCI president Ulrich Lehner said. "It will take several years to get back to the peak level, where chemistry was as recently as in the first half of 2008."

EXXONMOBIL ADVOCATES CARBON CLIMATE TAX
ExxonMobil Chemical is advocating the implementation of a carbon tax among developed nations to tackle the problem of climate change through promoting energy efficiency, the US company's president says. "For developed nations that are looking at different ways of putting a cost on carbon, what we advocate is an approach where the cost of carbon is very transparent and [where] that cost appeals to all sectors of the society," said Stephen Pryor, who was in Dubai to attend the 4th Gulf Petrochemicals and Chemicals Association (GPCA) summit. Pryor said that a carbon tax is a more straightforward approach than the carbon trading that is currently in place.

ECHA ADDS 15 SUBSTANCES TO CANDIDATE LIST
The European Chemicals Agency (ECHA) has classified 15 chemicals as substances of very high concern. Substances put on to the "candidate list" may impose certain legal obligations on the suppliers and users of the chemicals. The substances include lead chromate, acrylamide, refractory ceramic fibers and those used in the manufacture of anthracene and carbon black. The substances will be included on the list in January 2010, the agency said.

BASF UPGRADED AS CEO FORECASTS BETTER Q4
Investment bank Cazenove upgraded BASF's stock to 'outperform' after the German chemical giant's CEO gave a positive fourth-quarter outlook in a newspaper interview. Quoted in German national newspaper Frankfurter Allgemeine Sonntagszeitung last week, Jurgen Hambrecht, chairman of the board of executive directors of BASF, said the fourth quarter had turned out "better than expected." The company's earnings per share guidance had been upgraded by 23% to €2.39 ($3.57) for 2009.

CHEMICAL MAKERS EXPECT TO ENJOY GAINS IN 2010
Chemical producers are among 13 key US manufacturing industries that expect increased revenues in 2010, but they also anticipate higher prices for raw materials and labor, the Institute for Supply Management has said. Its semi-annual survey of purchasing and supply managers in 18 major manufacturing industries indicates that 60% expect revenues to be greater in 2010 than in 2009. Manufacturers said they expect a 6.7% increase in overall revenues next year, a sharp contrast to the 10.7% decline in cash flow recorded for 2009.

TESSENDERLO TO PHASE OUT GLYCINE BUSINESS
Tessenderlo is to withdraw from the glycine market by the end of 2010 due to structural problems in the European market and competition from China, the Belgium-based plastics and specialities producer said last week. The company said it would wind down ¬operations at its glycine production line at Tessenderlo in Belgium during the course of next year. "This strategic decision was taken because we can no longer compete with the Chinese producers of glycine, who are active in the European market," said spokeswoman Kathleen Iwens.

POLAND TO SELL ZAKLADY CHEMICZNE ALWERNIA
The Polish state is to sell its 25% stake in Zaklady Chemiczne Alwernia, which produces nitrogen phosphorus potassium (NPK) fertilizers, Poland's treasury ministry said last week. Offers for the stake should be submitted for a scheduled December 17 tender, it added. Ciech, Poland's largest chemical group, which is in the final stages of privatization, holds a 73.75% stake in Zaklady Chemiczne Alwernia. Private shareholders own the remaining 1.25%.

PEMEX PETROCHEM MAY DISSOLVE - ANALYST
An analyst with Mexico's Center for Economic Research and Education (CIDE) believes that state-run oil company Pemex would likely dissolve Pemex Petroquimica (PPQ) and merge it with the producer's other subsidiaries under a restructuring plan under consideration. Mexico energy industry analyst Miriam Grunstein said that PPQ's current incarnation was "absolutely pointless", adding that production costs for PPQ, compared with other international companies, were high. She said most of the high costs were related to the high number of workers employed.

BANKRUPT TRONOX MOVES AUCTION FOR TIO2 PLANTS
Bankrupt titanium dioxide (TiO2) producer Tronox has moved the auction of its plants to December 21, according to court documents filed last week. A sales hearing will be held on December 22. The auction had been previously scheduled for December 8 and the sales hearing for December 10. Tronox did not explain why it moved the auction. Huntsman has already made a $415m (€274m) stalking-horse bid for most of Tronox's plants. A stalking-horse bid sets a price floor for the subsequent auction. Huntsman could acquire the plants if no-one makes a higher bid and if its offer is approved by the court.

METHANOL TSUNAMI MAY FLOOD EUROPE
A tsunami of methanol from start-ups in the next five years is set to hit Europe, a consultant said last week. "Derivative growth predictions in Europe up to 2014 are lower than the rise of imports," said Nigel Suttie, director of methanol and derivatives at Chemical Market Associates Inc.

CORRECTION
In the December 7 issue of ICIS Chemical Business we incorrectly stated that Marijn Dekkers will take over as CEO of German chemical group BASF from October 2010. In fact he takes over as CEO of Bayer at that time.


Author: edf asdg



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