This week's world news

13 September 2010 00:00  [Source: ICB]

PETRONAS TO EXPAND PETCHEM CAPACITY
Malaysia's PETRONAS Chemical Group is planning to expand its petrochemical production capacity and develop new plants using gas and alternative feedstock once it is listed on the Malaysian stock exchange, a company source said. "There are plans for expansions, but those will probably be finalized after we finish the IPO [initial public offering]," the source said. The newly-formed PETRONAS Chemical Group is made up of 22 petrochemical-related firms within the PETRONAS group. The state-owned energy firm filed a draft prospectus on September 7 for an IPO of its entire petrochemical business.

US COURT REVERSES $1BN RULING VS. DOW, ROCKWELL
US-based Dow Chemical said it is pleased with the reversal of a ruling that would have required Dow and US industrial controls company Rockwell International to pay nearly $1bn (€790m) to owners of property near a former nuclear weapons plant in Colorado. The US Court of Appeals for the 10th Circuit sent the class-­action lawsuit back to the lower court, the US District Court for Colorado. The appeals court ­issued the opinion on September 3. Dow spokesman Scot Wheeler said: "From the outset of this case 20 years ago, Dow has claimed that there has been no harm to property owners and no damage to property values."

AKZONOBEL TO BUY CHINA AUTOMOTIVE PAINT FIRM
Netherlands-based paints and coatings firm AkzoNobel has agreed to acquire Chinese vehicle refinish supplier Changzhou Prime Automotive Paint for an undisclosed sum. Based in China's Jiangsu province, Changzhou Prime Automotive Paint makes automotive coatings, primarily for the refinish market. "This is an excellent deal which gives us strong representation in one of China's most promising growth segments," said Leif Darner, AkzoNobel's board member responsible for its performance coatings business. Earlier this year, AkzoNobel ­announced plans to double its revenue in China to $3.0bn (€2.4bn) within five years.

FATAL BLAST SHUTS TWO UNITS AT PEMEX REFINERY
A fatal blast at Mexican state oil company Petroleos ­Mexicanos (PEMEX's) Cadereyta ­refinery, in Nuevo Leon, shut down two of its 32 units. PEMEX shut down a hydrodesulfurization unit and a coker. The company did not say how long the two units would be down. The refinery's processing capacity will temporarily drop to 200,000bbl/day from 215,000bbl/day as a ­result of the shutdowns, PEMEX said. The explosion occurred last Tuesday at a hydrodesulfurization unit.

US LOWERS OIL AND NATGAS PRICING OUTLOOK
The US Department of Energy lowered its forecasts for oil and natural gas prices for the balance of this year and 2011, citing reduced expectations for US economic performance and the cooling global recovery. The department expects the average price for US benchmark West Texas Intermediate (WTI) crude to be $77/bbl in the fourth quarter, down by $4 from the agency's forecast in August. For 2011, the department expects global crude prices to average $82/bbl, or $2/bbl lower than its month-earlier prediction. It projected Henry Hub natural gas spot prices to average $4.54/MMBtu for the full-year 2010, down by $0.15/MMBtu from last month's forecast. In 2011, the price is expected to be $4.76/MMBtu, lower by $0.22/MMBtu from its August outlook.

STUDY: CCS NOT VIABLE IN GERMANY, EUROPE
Carbon capture and storage (CCS) technology is not likely to ­become a viable option for German or ­European industry - including chemicals and power plants - to fight carbon dioxide (CO₂) emissions, according to a study by The German Institute for Economic Research (DIW Berlin). Christian von Hirschhausen, director of research at DIW Berlin said that contrary to earlier promises and hopes, CCS had turned out to be "very uncertain and very ­expensive."

UHDE TO BUILD PET PLANT FOR OMAN'S OCTAL
German engineering firm Uhde Inventa-Fischer has signed a contract with Oman's Octal Petrochemicals to build a 550,000 tonne/year polyethylene terephthalate (PET) resin plant at Salalah, Oman. The company said the contract for delivery of two lines to Octal will use its melt-to-resin proprietary technology. The plant is scheduled to start up in April 2012, a spokesperson for Uhde Inventa-Fischer said.

FOSTER WINS CONTRACT FOR SAUDI LAB EXPANSION
US-based engineering firm Foster Wheeler has won a contract for work on a 100,000 tonne/year linear alkyl benzene (LAB) expansion project in Al-Jubail, Saudi Arabia. Gulf Farabi Petrochemical Company's new LAB plant is expected to be completed in 2011.

MITSUBISHI GAS TAKES CONTROL OF PIA SALES
Japan's Mitsubishi Gas Chemical (MGC) has taken over the sales function of its subsidiary, AG ­International Chemical Co (AGIC's) purified isophthalic acid (PIA) business amid tight supply of the material in the region. "MGC is targeting synergy with sales of its various chemical products and enhancing the company's overall competitiveness through direct management and total cost control," MGC said. PIA supply in Asia has become tight in recent months because of production stoppages across the region, according to the company. Turnarounds at Sweden-based Perstorp's 70,000 tonne/year PIA plant in Singapore and AGIC's 70,000 tonne/year unit in Mizushima, Japan, are expected to last until the end of September, MGC said.

DOW INDIA TO RELOCATE $86M R&D SITE IN INDIA
Dow India has decided to shift the location of its Indian rupees (Rs) 4bn ($85.7m) research and development (R&D) center in Chakan, Pune, a company source said. The company has asked Maharashtra Industrial Development Corp. for permission to surrender the 100 acres (40ha) it had obtained at the proposed site in Chakan, the source said, but did not provide a reason for the decision. However, according to India's Hindustan Times newspaper, Dow India, a subsidiary of US major Dow Chemical, had decided to surrender the land because of opposition from locals who were concerned about the damage the center could cause to the local ecosystem.

KAROON PETROCHEMICAL KEEPS TDI UNIT IDLE
Iran's Karoon Petrochemical will keep the country's first toluene di-isocyanate (TDI) facility in Bandar Mashahr idle until further notice, a company source said. The new TDI plant, with a nameplate capacity of 40,000 tonnes/year, started up in April but was shut after a month. The source declined to give reasons why the company was keeping the plant offline. However, Karoon Petrochemical is offering spot material from its inventories.

THAI POLYETHYLENE TO SHUT LDPE PLANT IN OCT
Thai Polyethylene plans to shut its 100,000 tonne/year low density polyethylene (LDPE) plant at Mab Ta Phut, in Thailand, for a week from early October for maintenance, a source close to the company said. Thai Polyethylene, a wholly-owned subsidiary of Thailand's largest conglomerate, Siam Cement Group, was not available for comment. The planned shutdown would further tighten local LDPE supply as the only other existing LDPE plant in Thailand, operated by local producer TPI Polene, has been producing mainly ethylene vinyl ­acetate copolymer, local traders said.

SIBUR, MOSCOW OIL REFINERY FORM PP JV
Russian petrochemical major Sibur and Moscow Oil Refinery have formed a joint venture (JV) to produce polypropylene (PP). Sibur acquired a 50% stake in NPP Neftekhimiya, which is an associated company of Moscow Oil Refinery that operates a 100,000 tonne/year PP facility at Kapotnya, near Moscow. Terms of the deal were not disclosed.

TOSOH TO SHUT UNITS FOR MARCH TURNAROUND
Japan's Tosoh plans to shut its 527,000 tonne/year naphtha cracker in Yokkaichi, Mie prefecture, in March next year for a month-long turnaround, a company source said. The downstream low density polyethylene (LDPE) and ethylene vinyl acetate copolymer (EVA) plants at Yokkaichi would also shut during the same period, he said. The company runs two LDPE lines with a combined production capacity of 56,000 tonnes/year, a 43,000 tonne/year LDPE/EVA swing plant and a 120,000 tonne/year high density polyethylene (HDPE) plant in Yokkaichi.

AND YAMAGUCHI LDPE LINES IN OCTOBER
Japan's Tosoh plans to shut its low density polyethylene (LDPE) and ethylene vinyl acetate copolymer (EVA) plants in Yamaguchi in early October for 25 days of maintenance, a company source said. The affected facilities consist of two LDPE lines with a combined production capacity of 37,000 tonnes/year, as well as a 43,000 tonne/year LDPE/EVA swing plant in Yokkaichi, the source said.

NESTE OIL SIGNS RAPESEED OIL DEAL WITH RAISIOFinland's Neste Oil has signed an agreement with Finnish foodstuffs company Raisio on a long-term deal for the use of surplus rapeseed oil as raw material for renewable diesel. Neste Oil will use all the rapeseed oil generated as a by-product in Raisio's feed protein production that has no market in the food chain to produce biodiesel at its Porvoo refinery. No financial details of the deal, which is due to start in ­October, were released.

LUKOIL MULLS PERMANENT CLOSURE OF BURGAS UNITS
Russian energy major Lukoil is considering the permanent closure of its mothballed Lukoil Neftochim petrochemical units at Burgas, in Bulgaria. "The existing technological scheme of petrochemical production at the Burgas refinery in Bulgaria doesn't allow for it to be made profitable," Lukoil said. The plants include a 150,000 tonne/year ethylene cracker; an 85,000 tonne/year low density polyethylene (LDPE) ­facility; an 80,000 tonne/year ethylene oxide (EO) plant; a 100,000 tonne/year monoethylene glycol (MEG) plant; and a 10,000 tonne/year ethanolamines unit. The plants were closed more than a year ago.

BOREALIS APPOINTS LOBBERT POLYOLEFINS EVP
Austria-headquartered polymers firm Borealis has appointed Gerd Lobbert as executive vice president for polyolefins, effective October 1. Lobbert, currently executive vice president for base chemicals, will take over from Lorenzo Delorenzi, who has decided to leave the company to pursue other career opportunities, Borealis said.

TRINTERNATIONAL ADDS MITCHELL AS MANAGER
US-based chemical distributor TRInternational has appointed Jim Mitchell, as CASE (coatings, adhesives, sealants & elastomers) industry manager. He will be based in St. Louis, Missouri. Mitchell has more than 25 years of experience in the chemical industry, including specialty chemical distribution and CASE industry management.

KEMIRA TO INVEST €25M IN CHINA FACILITY
Finnish specialty chemicals company Kemira will invest around €25m ($32m) in a specialty process chemicals facility in Nanjing, China, to meet growing demand from the water treatment markets. The company said the plant would be a state-of-the-art regional production hub for a range of specialty process chemicals serving all of Kemira's customer segments. The plant will be located in the Nanjing Chemical Industry Park. Construction is scheduled to start during 2011 and the facility is expected to be operational in 2012.

AND ACQUIRE US WATER TREATMENT PRODUCTS FIRM
Kemira has acquired US-based water treatment products maker Water Elements (WE) for an undisclosed sum. WE is a producer of inorganic coagulants used in municipal and industrial water and wastewater treatment. WE has one production plant in Baltimore, Maryland, US, and posted revenue of around $10.0m (€7.9m) in 2009.

AIR PRODUCTS SWEETENS AIRGAS TAKEOVER BID
US industrial gases firm Air Products raised its offer to acquire US gases distributor Airgas by $2/share (€1.57/share), to $65.50. The value of the offer represents nearly $5.5bn in equity and $1.9bn of assumed debt. "We have provided Airgas shareholders with a clear path to completing a transaction, and we now need a strong mandate from the independent shareholders in electing the Air Products nominees and approving our by-law proposals at the September 15 annual meeting," said Air Products CEO John McGlade. He added that unless Airgas shareholders approved the measures, Air Products would walk away. Airgas subsequently rejected the offer as undervaluing its assets.

ZAT BOARD RECOMMENDS PURCHASE OF ZAK STAKE
The management board of Zaklady Azotowe Tarnow (ZAT) has recommended that the company go ahead with the purchase of a 53% stake in fellow Polish state-controlled chemical producer Zaklady Azotowe Kedzierzyn (ZAK). An October 4 ZAT extraordinary general meeting will take place to approve the zlotych (Zl) 150m ($48.2m, €37.9m) deal, which would be made possible by a share capital increase issued by ZAK, a nitrogen fertilizer, oxo-alcohols and polyamide 6 producer. A ZAT offer for an 89.46% stake in phosphorous fertilizer unit Fosfory Ciech could be made by September 15.

JAPAN JULY ETHYLENE EXPORTS SURGE 62%
Japan's ethylene exports surged by 62% to 36,493 tonnes in July from June, with shipments to China making up over half the total. China took in 21,908 tonnes of Japanese ethylene during the month, more than four times the volume it imported in June, said an official from the Ministry of Economy, Trade and Industry. Compared with the same period a year ago, however, Japan's ethylene exports fell by 20%, with double-digit declines in volumes shipped to China and South Korea.

COGNIS COMPLETES SALE OF UV ACRYLATES UNIT
Germany-based specialty chemicals firm Cognis has completed the sale of its UV acrylates business to Dutch company IGM Resins. Cognis agreed to sell the business in April. The UV acrylates business, which had been part of Cognis's Functional Products strategic business unit, makes monomers and oligomers for UV applications marketed under the Photomer brand. The sale includes the plant in Charlotte, North Carolina, US. The employees at the Charlotte site, as well as other employees in the US, France and Asia have been transferred to the new owner.

By: Joseph Chang
+1 713 525 2653

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