10 May 2010 00:00 [Source: ICB]
RAS LAFFAN OLEFIN CRACKER INAUGURATED
Qatar Petrochemical Co. (QAPCO's) Ras Laffan Olefin Cracker (RLOC) based on ethane, in Qatar, has been inaugurated. Ethylene from the 1.3m tonne/year plant is being piped to Mesaieed, where it will feed Qatofin's new 450,000 tonne/year linear low density polyethylene (LLDPE) plant. Total holds 22.2% of the RLOC project, which had been hit by delays. The other partners are Qatar Petroleum and Chevron Phillips Chemical. Around 150,000 tonnes/year of excess ethylene capacity from Ras Laffan will be sold, mainly to Southeast Asia, once the cracker and derivative plants are running stably. The cracker will have a structural excess of ethylene capacity until QAPCO's 300,000 tonne/year low density polyethylene (LDPE) plant comes on stream by the end of 2011.
SHELL COMPLETES SINGAPORE PROJECT
Anglo-Dutch energy major Shell said last week it had successfully completed its largest integrated petrochemical complex in Singapore. "Creating Shell's largest integrated site will bring considerable synergies in terms of feedstocks, operations and logistics," said CEO Peter Voser at the official opening ceremony of the mixed-feed 800,000 tonne/year cracker located in Bukom Island. The project also includes modifications to Shell's Pulau Bukom Refinery in Singapore, enabling it to process a wider range of crudes to supply feedstock to the cracker. An ethylene jetty and cryogenic terminal were also built to enable the import and export of ethylene, said the company.
AGREES PRODUCT SLATE WITH PETROCHINA AND QP
The petrochemicals product slate for the Qatar Petroleum (QP), PetroChina and Shell Chemicals project that is being planned for Taizhou in Zhejiang province, China, has "in principle" been decided, said Ben van Beurden, executive vice-president of global producer Shell Chemicals last week. "We have decided, in principle, on the product slate downstream of the cracker, but have yet to make this public," said van Beurden in an interview on the sidelines of the opening event of Shell's new cracker complex in Singapore. "We have [also] drawn up a framework agreement about how this project would work," he added.
CHEMICAL INDUSTRY M&A RISES BY 15% IN Q1
Merger and acquisition (M&A) activity in the chemical industry was much stronger in the first quarter (Q1), driven by five large deals worth $17.9bn (€13.8bn) in total, compared with Q1 2009, said PricewaterhouseCoopers last week. Overall, there were 33 more deals in the Q1 2010, reflecting a 15% increase from the same period a year ago. "Large-deal activity is off to a strong start in [the] first quarter of 2010, as five deals with a value greater than $1bn were announced, substantially driving total deal value," the global accounting and advisory firm said. These five deals already surpassed total large-deal activity for all of 2009.
IRAN'S KHARG PUSHES BACK METHANOL STARTUP
Iran's Kharg Petrochemical has pushed back the start-up of its 1.4 m tonne/year methanol plant on Kharg Island to late 2013. The $281.2m (€219.3m) project was expected to come on stream in late 2010 but has been delayed as a result of the long lead time in construction of the feedstock natural gas facility. Natural gas is supplied from the National Iranian Oil Co. The methanol plant will use a process licence and catalysts provided by UK-based Johnson Matthey Catalysts, while Davy Process Technology, also of the UK, will render basic engineering technical assistance.
US CHEMICAL RAIL USERS PRESS ANEW FOR REFORM
US chemical producers have joined forces to urge prompt action by Congress on long-pending legislation to reform federal regulation of railroads and rail freight rates. Tom Coleman, vice president for governmental affairs at German chemical major BASF and speaking for the American Chemistry Council, told a meeting at Congress on Capitol Hill: "The chemical industry can no longer tolerate paying higher and higher prices for bad service." Coleman and representatives from Dow Chemical, DuPont and Olin, all US, Germany's Bayer, as well as Rhodia and Arkema, both French, called on members of Congress to press for rail rates reform as part of the sixth annual "Rail Customer Day" on the Hill.
BRAZIL'S QUATTOR TO HIKE RESINS OUTPUT
Brazilian petrochemical producer Quattor is expanding its thermoplastic resins output by around 350,000 tonnes/year in 2010. "Our PE [polyethylene] complex in Sao Paulo state, formerly known as Petroquimica Uniao, is increasing its ethylene capacity from 500,000 tonnes/year to 700,000 tonnes/year," said Armando Bighetti, Quattor's vice president for PE. According to Quattor, the additional 200,000 tonnes/year of ethylene would be converted into an equivalent volume of PE in Sao Paulo. "The extra ethylene produced will be directed to the production of PE in our new facility in Sao Paulo," he added.
OLTCHIM TO RESTART OPERATIONS AT ARPECHIM
Romania's petrochemical group, Oltchim, intends to restart operations at the Arpechim refinery's petrochemical unit on June 1, 2010. The unit was mothballed in late 2008 by its previous owner, Romanian refiner Petrom, causing Oltchim a severe shortage of feedstock and being partly responsible for reducing its production to around 30% for the past year. Oltchim said that since it acquired the facility from Petrom in January, work to ready the plant was under way. This includes the restart of a 200,000 tonne/year ethylene cracker in Pitesti, which is linked to Oltchim by a local pipeline.
POLYONE SWINGS TO NET PROFIT OF $18.4M
PolyOne swung to a first-quarter (Q1) net profit of $18.4m (€14.2m) from a loss of $17.7m in 2009 as a result of a significant increase in sales following new business gains and improved demand. The US-based polymer firm said it achieved its highest quarterly earnings since the Q2 2006, after revenue grew by 36% to $630.4m, driven by a 27% rise in sales volume. Stephen Newlin, chairman, president and CEO, said the earnings power of the company had been "transformed," adding: "We have overcome trough-like conditions in housing, as well as a significant decline in earnings from our chlor-alkali joint venture."
POLAND'S CIECH UNLIKELY TO ATTRACT BUYER
Poland's largest chemicals manufacturer, Ciech, will probably not attract a privatization buyer this year unless there is a significant improvement in the company's key markets, said an industry analyst last week. "It seems the treasury is holding out for a high price despite the effects of the economic downturn having created a difficult environment. So the whole privatization could turn on whether there is or is not a strong pick-up this year in Ciech's main markets," said Kamil Kliszcz, an analyst at Poland's BRE Bank.
BUYERS UNFAZED BY US DOW TDI PLANT CLOSING
The permanent closing of Dow Chemical's toluene di-isocyanate (TDI) plant in Freeport, Texas, US, caused little concern, given that the market was amply supplied, said urethane foam manufacturers last week. "The plant closure is almost a non-event," a TDI buyer said. Dow Chemical closed the plant at the end of April. TDI consumers said closing the plant would have no impact at this time, and pointed to overcapacity in the US and global markets. Supply is currently not an issue, sources added. Even if production issues emerged in the US, consumers said there was previous experience with TDI imports, which would again be feasible if necessary.
US TO CREATE STANDARD FOR DISTRIBUTORS
The National Association of Chemical Distributors (NACD) is seeking to create a global standard for its program to improve health, safety and other areas, according to its president. The Responsible Distribution program is the NACD's initiative, focusing on continuous improvement in the areas of environment, health, safety and security among chemical distributors. The NACD certifies compliance through third-party verification. "We want to gain greater recognition for Responsible Distribution globally so suppliers who deal with distributors in different countries will know they are working with partners that follow top environmental, health and safety practices," said NACD president Chris Jahn in an interview with ICIS.
GERMANY'S ALTANA SWINGS TO Q1 NET GAIN
German specialty chemical producer Altana has reported a first-quarter (Q1) net profit of €39.5m ($50.1), compared with a loss of €200,000 last year, on the back of strong sales. Sales for the January-March period jumped by 44% year on year to €361.5m. Earnings before interest and taxes in the first three months of 2010 surged to €59.1m from €3m in the same period a year ago. "With favorable raw materials pricing, we have benefited from the clearly improving economic situation, as well as our measures to enhance efficiency," said the company's CEO, Matthias Wolfgruber.
CHEMTURA COMPLETES SALE OF PVC ADDITIVES
US specialty chemicals producer Chemtura has completed the sale of its polyvinyl chloride (PVC) business to Galata Chemicals for $16.2m (€12.2m). Galata is a partnership between Mumbai-based Artek Surfin Chemicals and Aterian Investment Partners, a private-equity firm based in New York.
NALCO STOCK JUMPS ON PRODUCT USE IN CLEANUP
Shares of US-based specialty chemicals company Nalco soared to a three-year high after CEO Erik Fyrwald revealed that the company's propylene glycol-based dispersant Corexit was being used on the massive oil spill in the Gulf of Mexico. Nalco shares jumped by $1.46, or 5.9%, to $26.19 last Monday, having hit $29.25 earlier that day. Trading spiked when Fyrwald appeared on TV to announce Nalco was working with BP to inject the product near the wellhead on the ocean floor as well as on the oil at the surface.
PETROBRAS PARTNERS IN BIODIESEL PLANT
Brazilian oil giant Petrobras will invest in a $530m (€398m) biodiesel plant in Portugal as part of a joint venture with Galp Energia. Petrobras will invest $240m in the 250,000tonne/year plant and Galp Energia will provide the remainder. Production is expected to start in 2015. Petrobras will provide 300,000 tonnes/year of palm oil as feedstock and the finished fuel will supply the European market.
KUWAIT TO TAKE STAKE IN PARADIP PROJECT
Kuwait has agreed to take a stake in IndianOil's petrochemical complex in Paradip, according to a source at the state-owned company. IndianOil offered Kuwait a 10% interest in the project to make the complex in the Bay of Bengal more financially viable, the source said. "They have in principle agreed to take a stake in the project but we are yet to get into details," the source said. The Paradip complex would have a 15m tonne/year refinery with paraxylene (PX), propylene and styrene production in the first phase, and a cracker with derivative units in the second phase.
BP TO FOOT ENTIRE BILL FOR GULF OIL SPILL
US President Barack Obama has said that BP will bear the full cost of cleaning up the massive oil spill off the US Gulf Coast. "Let me be clear - BP is responsible for this leak. BP will be paying the bill," said Obama in a speech in Venice, Louisiana. It could cost BP $2bn-3bn (€1.5bn-2.25bn) to clean up the spill once it reaches land, "potentially more, the longer it takes to arrest the flow of oil into the Gulf," said Jeffrey Woodruff, senior director at global credit ratings firm Fitch.
SCHULMAN COMPLETES ICO ACQUISITION
US-based plastics compounder A. Schulman has completed its acquisition of global specialty resins manufacturer ICO. The deal is for $105m (€80m) in cash and 5.1m shares of Schulman stock. "With the addition of ICO's operations, A. Schulman will strengthen its presence in the US masterbatch market, gain plants in the high-growth markets of Brazil and Malaysia, and add facilities in Australia," Schulman said.
SOLUTIA BUYS NOVOMATRIX FOR $73M
US specialty chemicals company Solutia has acquired Novomatrix, a window films company based in Singapore, for $73m (€55m). Novomatrix's films are used in the automotive aftermarket, as well as in houses and buildings. Solutia expects the deal to expand its reach in Southeast Asia and the Middle East, complementing the company's presence in northern Asia.
FMC PROFIT UP BY 12% IN Q1 AS SALES GROW
US chemical maker FMC has posted first quarter (Q1) net income of $77.4m (€58.1m), up by 12% year on year, amid stronger sales in Latin America and Europe. Sales were up by 10% year on year to $756.5m, driven by growth in agricultural products and specialty chemicals. FMC's soda ash export sales volumes grew, but at lower prices than the year before, as the company sought to gain market share. FMC boosted its full-year earnings per share outlook to $4.45-4.80 from its previous guidance of $4.35-$4.75.
TREVIRA TO LOOK FOR BUYER LATER THIS YEAR
Germany-based textile fiber maker Trevira expects to seek a new investor to buy the company later this year, its supervisory board chairman Werner Schneider said. An earlier effort to sell Trevira to two investors fell through in December 2009.
VINNOLIT RESTARTS PVC PRODUCTION AT COLOGNE
Germany-based polyvinyl chloride (PVC) producer Vinnolit restarted its Cologne facility on schedule on April 26. A company source said on April 30 that the site, with a nameplate capacity of 170,000 tonnes/year, according to ICIS data, was in the process of ramping up operating rates. The unit had gone down on April 18 for a planned week-long maintenance shutdown.
GEORGIA GULF DECLARES FM ON CHLOR-ALKALI
US commodity chemical manufacturer Georgia Gulf has declared force majeure on chlor-alkali production at its Plaquemine plant in Louisiana, a source close to the US company said. The production unit went offline on April 24, with force majeure declared on April 26. No formal product allocation had been issued, and operations are expected to resume in early May.
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