This week's world news

28 February 2011 00:00  [Source: ICB]

OIL MAJORS CURB LIBYA PRODUCTION
Oil majors Italy-based ENI, Canada's Suncor, Austria's OMV and France's Total curbed their operations in Libya and are taking steps to protect their staff amid increasing political unrest in the oil-rich north African country. German chemical major BASF's energy unit, Wintershall, said most of its international employees had now left troubled Libya. According to the International Energy Administration (IEA), Europe receives over 85% of Libya's crude exports, while about 13% heads east of Suez. In 2010, Libya exported 1.2m bbl/day of crude oil to IEA countries.

BHP BILLITON BUYS CHESAPEAKE SHALE ASSET
UK-based mining company BHP Billiton has agreed to acquire US natural gas producer Chesapeake Energy's interests in the Fayetteville shale gas project in Arkansas, US, for $4.75bn (€3.52bn), marking its entry into the US shale gas business. Chesapeake's Fayetteville shale assets produce more than 400m cubic feet of gas/day, BHP said. "The operated position we are obtaining will immediately make BHP Billiton a major North American shale gas producer," said Michael Yeager, CEO of the company's petroleum business.

MITSUBISHI, ASAHI KASEI SET UP MIZUSHIMA UNIT
Japanese chemical producers Mitsubishi Chemical and Asahi Kasei have set up a unit to manage the unified operations of their naphtha crackers in Mizushima, they said in a joint statement. The 50:50 joint-venture unit called Nishi Nippon Ethylene, a limited liability partnership, will start operations on April 1. The Mizushima industrial zone in Okayama, Japan, houses Asahi Kasei's 500,000 tonne/year naphtha cracker and Mitsubishi Chemical's 500,000 tonne/year ethylene facility. Nishi Nippon's responsibilities range from procuring feedstocks to the production and sales of basic petrochemicals, including ethylene, to the partners.

PKN ORLEN TO DELIVER PTA TO SK EUROCHEM
Polish chemical company PKN Orlen has agreed to deliver output from its new 600,000 tonne/year purified terephthalic acid (PTA) plant to a fellow Polish company, polyethylene terephthalate (PET) manufacturer SK Eurochem. The agreement, concluded for an indefinite period, should be worth approximately zloty (Zl) 1.8bn ($620m, €453m) in its first five years. The technological start-up of the PTA plant is imminent, Orlen said. Like Orlen's PTA plant, SK Eurochem's PET manufacturing facility is located in Wloclawek, near Plock in northern Poland. It has a capacity of 140,000 tonnes/year.

STEPAN FINISHES 1ST PHASE OF EXPANSION
US-based chemical firm Stepan has completed the first phase of an aromatic polyester polyols expansion project at its plant in Wesseling, Germany. "We plan to run polyols through the plant as of April," said Roger Stubbs, vice president, European polymers. Phase one has increased capacity from 50,000-55,000 tonnes/year to 90,000-95,000 tonnes/year. Phase two will raise the capacity to 120,000 tonnes/year and will include improved logistics, he added. "We will engage the project [phase two] as soon as the market requires it, perhaps in 2012," said Stubbs.

HEINZ TO JOIN COCA-COLA IN USING PLANT-BASED PET
US consumer food group H.J. Heinz will partner with US-based Coca Cola to produce ketchup bottles using polyethylene terephthalate (PET) packaging derived from plants. Coca-Cola manufactures its PlantBottle packaging using sugarcane ethanol from Brazil. Up to 30% of the packaging material is derived from plants. Heinz will launch its version of the PlantBottle in all 20-ounce ketchup bottles in June 2011, it said, with 120m such packages to be introduced in 2011. Each bottle provides a 12-19% reduction in carbon impact compared with traditional packaging material, the companies said.

US CLEANTECH INVESTMENT TO RISE IN 2011
High energy prices and continued environmental concerns will further drive investments in clean technology in 2011 after a record investment year last year, said Jefferies & Company. The firm released its annual Clean Technology Primer report during a two-day investor conference in New York last week. "The two themes for 2011-2012 are companies that enable the conversion of biomass to feedstock and can deliver step-changes in economics that disrupt established markets, especially broad commodities such as nylon, polyethylene and polypropylene," said Jefferies & Co. analyst Laurence Alexander.

ENTERPRISE PRODUCTS BIDS FOR DUNCAN ENERGY
US-based natural gas processor Enterprise Products Partners has made an offer to acquire US-based Duncan Energy Partners. The deal between the two Houston-based midstream energy firms will be structured as a merger, Enterprise said. "We believe this proposal should be attractive to Duncan Energy Partners investors who would participate in the future growth of Enterprise, which has a backlog of pending capital projects and a more diverse existing asset base," said Enterprise CEO Michael Creel.

RHODIA Q4 NET PROFIT SURGES TO €91M
France-based chemical firm Rhodia's net profit surged to €91m ($124.7m) in the fourth quarter (Q4) 2010 from €28m in the corresponding period in 2009, with sales rising by 16% year on year. Q4 sales totaled €1.36bn. "In 2010, Rhodia achieved a breakthrough step-up in profitability. We defined growth as the strategic priority and implemented a new decentralized management model as its driving force," said CEO Jean-Pierre Clamadieu. Rhodia's polyamide business reported that Q4 recurring earnings before interest, tax, depreciation and amortization (EBITDA) remained steady at €77m versus the year-ago period. Polyamide net sales for the quarter rose by 12% year on year to €542m, it said.

TAIYO VINYL TO SHUT PVC PLANT IN MARCH
Japan's Taiyo Vinyl plans to shut down its 310,000 tonne/year polyvinyl chloride (PVC) unit at Yokkaichi, in Japan's Mie prefecture, for maintenance beginning at the end of March, a company source said. The turnaround is expected to last until the middle of April, the source said. The plant's PVC products for export will likely be affected by the shutdown, said a market source.

IRAN'S PCC EYES MORE PX EXPORTS TO CHINA
Iran's Petrochemical Commercial Co. (PCC) has set its sights on exporting more paraxylene (PX) to the key Chinese market by the third quarter after it restarts its 180,000 tonne/year unit at Bandar Imam, a company source said. PCC's Bandar Imam unit has been shut since April 2009 after a glitch at the facility. "We [have] brought in the required catalyst for the Bandar Imam unit, but we are still trying to arrange for engineers to come in and perform the work," the source said. "A Chinese purified terephthalic acid (PTA) maker has already shown keen interest to offtake additional PX from the third quarter of the year."

NOVA TO GET ETHANE FROM NORTH DAKOTA
Canada's NOVA Chemicals plans to buy and transport ethane from US state North Dakota via a proposed pipeline to Alberta, Canada. NOVA signed agreements with US-based energy company Hess and US-based Vantage Pipeline to buy and transport ethane production from Hess's Tioga gas plant in North Dakota. NOVA said it has the right to buy 100% of the ethane from the plant. The proposed 60,000 bbl/day pipeline will be built, owned and operated by Vantage and is expected to start up in the fourth quarter of 2012. "The signing of these agreements is an important milestone, and we are now one step closer to securing access to a sustainable, long-term supply of cost-competitive feedstock," said NOVA chief executive Randy Woelfel.

US JANUARY ARCHITECTURE INDEX DROPS
An index that measures future US construction activity dropped by nearly four points in January, down from a multiyear high the previous month. The American Institute of Architects (AIA) said its Architecture Billings Index (ABI) fell to 50 in January from a seasonally adjusted 53.9 in December. The November reading was 52, its highest in three years. "This slowdown is indicative of what is likely to be a very gradual improvement in business conditions at architecture firms for the better part of this year," AIA chief economist Kermit Baker said.

GENENCOR MULLS BIO-ISOPRENE PILOT PLANT
US enzymes producer Genencor is considering construction of a bio-based isoprene pilot plant for the eventual production of tires. Speaking on the sidelines of the National Ethanol Conference in Phoenix, Arizona, US, Aaron Kelley, senior manager of business development for Genencor, said his company is collaborating with US tire manufacturer Goodyear on bio-based isoprene production. "That project is at a stage for siting a pilot facility and the final stages of engineering at the pilot scale," he said.

WESTLAKE Q4 NET SURGES ON HIGHER MARGINS
US-based Westlake Chemical's Q4 2010 net income surged to $84.1m (€62.2m), compared with $12.5m in the year-ago period, on higher margins and strong demand. Sales increased 26% year on year to $795.4m, primarily due to higher sales prices for all of the group's major products and higher sales volumes for polyvinyl chloride (PVC) resin and caustic soda. "We achieved significant improvement in earnings in 2010 in spite of the slow recovery in the broader economy and continued weakness in the US construction markets," said Westlake CEO Albert Chao.

UBE CHEMICAL EUROPE DECLARES CAPRO FM
UBE Chemical Europe has declared force majeure (FM) on supplies of caprolactam (capro) due to an "unexpected and significant technical incident" at its plant in Castellon, Spain, said a company source. In a letter to customers, UBE said that its technical and management team is making all efforts to restore the normal operation of the unit as soon as possible and to avoid interruption of supply to its customers. It added that the FM is expected to be "very short." UBE was scheduled to shut down its 95,000 tonne/year caprolactam plant in Castellon for planned maintenance in May.

LIBYA'S NOC SHUTS METHANOL PLANT
Libya's state-owned oil company National Oil Corp. (NOC) has stopped methanol production at its plant at Marsa El Brega due to safety fears amid political unrest in the north African country, according to a source with Malta-based trading company Chempetrol. The source said production was believed to have been stopped on February 21, and that methanol was being put into storage for security. Chempetrol purchases methanol produced at NOC's Marsa El Brega plant. NOC could not be reached for comment. The source added that the plant, which has an output of about 680,000 tonnes/year, was recently running at 70-80% of capacity.

AKZONOBEL SELECTS MD OF CHINA DECORATIVE PAINTS
Dutch coatings giant AkzoNobel has appointed Lin Liangqi as its new managing director for decorative paints in China and north Asia, effective April 1. The appointment will help its strategic medium-term growth ambitions to double revenue in China, from $1.5bn (€1.1bn) to $3bn, the group said. "His extensive experience, notably in China and India, will help us achieve our business ambition of significantly increasing the Dulux brand's market share in the next five years," said Tex Gunning, AkzoNobel's executive committee member responsible for decorative paints.

TOSOH PLANS VCM MAINTENANCE IN MARCH
Japan-based chemical company Tosoh will shut its 260,000 tonne/year vinyl chloride monomer (VCM) plant in Yokkaichi for a one-month turnaround in mid-March, a company source said. The shutdown is expected to exacerbate the tight supply of VCM as it comes amid several turnarounds in Asia in February and March, market sources said. Tosoh also runs a 1.25m tonne/year VCM plant in Nanyo, Japan.

POWER FAILURE SHUTS YNCC'S YEOSU CRACKER
South Korea's YNCC suffered a power failure at its Yeosu complex that shut its 857,000 tonne/year No. 1 cracker, along with some of its other downstream plants, last Tuesday, company sources said. The cracker, as well as YNCC's aromatics unit, styrene monomer (SM) plant and butadiene (BD) unit halted operations. YNCC's aromatics unit can produce 140,000 tonnes/year of benzene, 80,000 tonnes/year of toluene and 50,000 tonnes/year of solvent-grade xylene. Its SM unit has 285,000 tonnes/year of capacity, while its BD unit has 240,000 tonnes/year of capacity.

CHINA'S TWO MELAMINE MAKERS RESTART UNITS
Two major melamine producers in China - Zhongyuan Dahua and Sichuan Petrochemical - have restarted their plants after feedstock natural gas supply was resumed, a source close to both the companies said. China's Henan Zhongyuan Dahua Company, a major fertilizer producer in central China, restarted its 30,000 tonne/year melamine plant last Tuesday after it was shut in the first half of January. Sichuan Petrochemical, in southwest China, has achieved on-spec production at its 30,000 tonne/year melamine plant after it was restarted in early February. The plant had been shut since December 12.

GM: US ETHANOL NEEDS NEW SUCCESS STORY
US ethanol needs a second-generation success story to fend off critics and encourage customers, said Mark Maher, executive director - power train and vehicle integration for US automaker GM, at the National Ethanol Conference, in Phoenix, Arizona, US. Maher said the official target for second-generation ethanol in 2011 is 250m gal (946m liters), but the latest projection for this year is around 6m gal. "We need a second-generation, 100m [gal] a year plant operating at full capacity, and that would go far in taking the wind out of pundits, encourage automakers to enhance FFV (flex-fuel vehicle) offerings strengthen policy and support and excite customers," he said.

RFA: ETHANOL CAN HELP SHIELD US FROM CRISES
Ethanol production can help shield the US from volatility in the crude oil market caused by a new wave of conflicts in the Middle East, US ethanol group Renewable Fuels Association (RFA), president Bob Dinneen said. He said the unrest in Egypt would be nothing compared with a conflict that could potentially disrupt crude oil flow through the Strait of Hormuz, which is located between Iran and Oman. The Suez Canal is used to move 2m bbl/day of oil. That compares with 50m bbls that flow through the Strait of Hormuz on a daily basis, he told delegates at the National Ethanol Conference in Phoenix, Arizona, US.

RFA DECRIES PROPOSED E-15 LABEL AS 'ALARMIST'
A proposed US Environmental Protection Agency (EPA) label that warns 15% ethanol fuel blend (E-15) could damage some vehicles is "unnecessarily alarmist and unsupported by the record," the president of the Renewable Fuels Association (RFA) said. The EPA "can't justify a [pump] label that says 'this fuel may damage other vehicles,'" said RFA president Bob Dinneen at the National Ethanol Conference held in Phoenix, Arizona, US. The EPA had granted a waiver allowing E-15 ethanol blends in cars built from the year 2001, but the action did not include E-15 blends for motorcycles, vehicles with heavy duty engines, buses, off-road vehicles, lawn mowers or chainsaws. "Exempt lawn mowers if you need to, but there is no evidence suggesting an issue with any vehicle," Dinneen said. "EPA's label must go."

GERMANY RAIL STRIKES DISRUPT TRAFFIC
Germany's train drivers severely disrupted rail traffic in several large cities and regions last Tuesday by taking industrial action to put pressure on rail carriers in the current 2011 wage round. Union GDL, which represents Germany's 26,000 train drivers, warned employers and the public to expect additional "warning strikes" in coming weeks. The strikes mainly affected passenger traffic in Berlin, Dresden, the Frankfurt-Wiesbaden-Mainz region, Stuttgart and cities in North Rhine-Westphalia. Three years ago, a strike by Germany's train drivers disrupted chemical and other rail shipments in Europe's largest economy.

RUSSIAN CAUSTIC SODA PLAYERS TO MERGE
Russia's Federal Anti-Monopoly Service has approved a request from Soda Sterlitamak and Caustic Sterlitamak to merge the two companies into one entity. Soda Sterlitamak is the country's major soda ash producer, while Caustic Sterlitamak produces caustic soda and polyvinyl chloride (PVC), among other products. Both plants are based in the Sterlitamak, Bashkortostan region in Central Russia, and are controlled by Russia's Bashkirskaya Khimiya holding company.

COATEX OPENS CHINA TECH CENTER
Coatex, a subsidiary of France-based chemical firm Arkema, celebrated the inauguration of its new Asia Pacific Application Laboratory & Technical Center in Changshu, China. The technical center will be dedicated to support Coatex Asia Pacific customers in the coatings, paper, construction and mineral-processing markets. The team will work closely with Coatex R&D centers in Europe and the US. The solutions developed in Changshu will be eco-friendly, as Coatex is entirely dedicated to water-based technologies, said Coatex.


By: Will Beacham
+44 20 8652 3214



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