The world this week

29 November 2012 18:46  [Source: ICB]

MIDDLE EAST & AFRICA

JOINT VENTURE UNITS TO START UP IN Q2 2013
Saudi Arabia's Sahara Petrochemicals and mining company Ma'aden are scheduled to start up their joint-venture caustic soda and ethylene dichloride (EDC) plants at Jubail in the second quarter of 2013, a source at Sahara Petrochemicals said at the Gulf Petrochemicals & Chemicals Association (GPCA) annual meeting in Dubai. The 250,000 tonne/year caustic soda plant and the 300,000 tonne/year EDC facility are being built at Jubail Industrial City. Construction of the plants is due to be completed by the end of 2012.

NEW GCC RAIL NETWORK TO BOOST PETCHEM TRADE
The Gulf Cooperation Council's (GCC) proposed railway network could take over a significant portion of intraregional petrochemicals trade, which is currently being transported in trucks, the GPCA said at its annual meeting. Inter-GCC trade volume of plastics, chemicals and fertilizers now stands at more than 2.5m tonnes/year and is set to grow as new production capacities come on stream in the region, it said.

TSOC TO START UP BUTYL-A PLANT IN JUNE 2013
Saudi Arabia's Tasnee Sahara Olefins Co (TSOC) expects to bring its 160,000 tonne/year butyl acrylate (butyl-A) plant in Al Jubail on stream next June, a source familiar with the project said at the GPCA annual meeting. "Around 36,000 tonnes/year of product from the plant will be consumed in Saudi Arabia, while the remaining 124,000 tonnes/year will be exported," the source said.

SAPCO TO START UP SAP PLANT IN SEPTEMBER 2013
Saudi Acrylic Polymers Co (SAPCO) expects to start up its 80,000 tonne/year superabsorbent polymers (SAP) plant in Al-Jubail, Saudi Arabia, in September 2013, a source close to the project said at the GPCA annual meeting. This would be the first SAP plant in the Middle East. SAPCO is a joint venture between Saudi Arabia's National Industrialisation Co (Tasnee) and Sahara Petrochemicals and Germany's Evonik Industries.


ASIA

KECL TO EXPAND SOLVENTS PLANT BY THE END OF 2012
India's Kandla Energy and Chemicals (KECL) is scheduled to complete the capacity expansion of its solvent plant in Gujarat state by 75% by the end of the year, the company's general manager, Anand Oza, said at the GPCA annual meeting. The solvent plant's capacity will increase to 350,000 tonnes/year from 200,000 tonnes/year. The solvent plant produces aromatics and aliphatic solvents.

CHEIL INDUSTRIES TO EXPAND YEOSU ABS PLANT
Cheil Industries, an affiliate of South Korean conglomerate Samsung Group, plans to expand its acrylonitrile-butadiene-styrene (ABS) production capacity in Yeosu by about 20% in March next year, a source close to the company said. The facility currently has an ABS capacity of 460,000 tonnes/year. "The expansion will increase the [plant's] ABS capacity by 90,000 tonnes per year to around 550,000 tonnes per year," the source said.

TAEKWANG CUTS ACN UNIT OPERATIONS TO 80%
South Korea's Taekwang Petrochemical has further reduced operating rates at its 290,000 tonne/year acrylonitrile (ACN) plant in Ulsan to 80% because of negative margins, a company source said. The plant will run at this reduced rate until its annual maintenance in February 2013. The plant was running at around 90% of capacity in October, the source said.

LANXESS HIRES FOSTER WHEELER TO BUILD PLANT
German specialty chemicals group LANXESS has contracted Foster Wheeler to build what is expected to be the world's largest ethylene-propylene-diene monomer (EPDM) synthetic rubber plant, the Swiss petrochemical engineering firm said. The €235m ($305m) plant has a predicted EPDM production capacity of 160,000 tonnes/year and should start up in 2015. EPDM is used in the automotive industry for door sealants or windscreen wipers.

INDIA OFFERS CAPITAL FOR ASSAM PETCHEM PROJECT
India's government is providing $120m-150m (€92m-116m) in extra capital subsidy to facilitate Brahmaputra Cracker and Polymer Ltd's petrochemical project in Assam province, a government official said. The project will have a 220,000 tonne/year high density polyethylene (HDPE)/linear low density polyethylene (LLDPE) swing plant; a 60,000 tonne/year polypropylene (PP) plant; a 55,000 tonne/year raw pyrolysis gasoline (pygas) plant; and a 12,500 tonne/year of fuel oil plant based on naphtha and gas feedstocks.

PTT EYES PETROCHEMICAL INVESTMENT IN VIETNAM
Thailand's energy giant PTT is considering investing in a $28.7bn (€22.1bn) refinery and petrochemical project in Vietnam, a company source said. Its subsidiary, PTT Energy Solution, carried out a feasibility study on the proposed project, which will include a 600,000 bbl/day refinery, to be located at Binh Dinh in central Vietnam. The project is also expected to produce 3.7m tonnes/year of aromatics and 6.5m tonnes/year of olefins.

SEKISUI TO BUILD NEW CPVC UNIT AT SHUNAN
Japan's Sekisui Chemical plans to build a new 7,000 tonne/year chlorinated polyvinyl chloride (CPVC) plant at Shunan in Yamaguchi prefecture. The project will boost the company's total CPVC capacity at the site to 40,000 tonnes/year from 33,000 tonnes/year, Sekisui Chemical said. Construction of the new unit is expected to be completed by the summer of 2013.


AMERICAS

BASF COMPLETES $1.02BN BECKER UNDERWOOD DEAL
BASF has completed the acquisition of US-based biological seed-treatment-technology provider Becker Underwood from investment firm Norwest Equity Partners for $1.02bn (€785bm), the Germany-based chemicals major said. Most of Becker Underwood's businesses will join BASF's newly established Functional Crop Care business unit, which will become effective 1 January 2013. Becker Underwood's animal nutrition business will be integrated into BASF's Nutrition & Health division.

DOW ARGENTINA PLANS $14M PE PLANT UPGRADE
Dow Argentina, a subsidiary of US chemicals company Dow Chemical, said it is investing Argentina pesos (Ps) 67m ($14m, €11m) to upgrade its polyethylene (PE) operations at its Bahia Blanca petrochemical complex in Buenos Aires province. Work has already begun to construct a new ground flare that will improve the combustion process in the complex's two ethylene plants. The upgrade will significantly reduce venting, which will cut down on noise and smoke. The project is expected to be completed in the third quarter of 2013.

FOSTER WHEELER BUYS ENGINEERING COMPANY
Foster Wheeler has bought Canada's Three Streams Engineering for an undisclosed sum, the Switzerland-based petrochemicals and energy engineering firm said. Calgary-based Three-Streams is an engineering, procurement and construction management company with upstream and downstream projects in western Canada. The acquisition will allow Foster Wheeler to increase upstreamcapabilities of its engineering and construction Group, as well asincrease the company's presence in Canadian oil sands industry.

PEMEX INSISTS MEXICHEM VCM DEAL STILL ON TABLE
State-run oil company Petroleos Mexicanos (Pemex) said a joint venture to produce vinyl chloride monomer (VCM) is still possible, despite the Mexican chemical conglomerate announcing that it was scrapping the deal due to long delays. On 22 November, Mexichem said it is going to concentrate on opportunities outside of Mexico instead, but on 27 November, Pemex said the project has not been cancelled or rejected. The joint venture, announced in June 2011, would increase the VCM capacity at Pemex's Pajaritos plant from 200,000 tonnes/year to 450,000 tonnes/year.

PEMEX RESTARTS MEXICO ETHYLENE OPERATIONS
Petroleos Mexicanos (Pemex) has begun to restart operations at its ethylene plant at the Pajaritos petrochemicals complex in Coatzacoalcos, Veracruz, Mexico, the state-owned oil company said. The restart is part of the company's annual scheduled maintenance programme. There were no disruptions in the supply of ethylene, the company said. Pemex has an ethylene capacity of 180,000 tonnes/year at Parjaritos, according to ICIS plants and projects.

PHILLIPS 66 RESUMES OPERATIONS AFTER SANDY
Phillips 66 resumed normal operations at its refinery in Linden, New Jersey, US, the firm said on 27 November. The 238,000 bbl/day refinery was shut on 29 October before Hurricane Sandy hitthe US northeast. The refinery temporarily lost power, and about 185 bbl of oil was spilled as a result of the storm surge.

API FILES SUIT AGAINST EPA OVER BIODIESEL
The American Petroleum Institute (API) said it has filed a suit against the US Environmental Protection Agency (EPA), seeking to overturn the agency's mandate for biodiesel fuel consumption of 1.28bn gal in 2013. The API said the mandate, which is a 28% increase from the 2012 mandate, is unworkable and can raise the cost of making diesel fuel.

BRAZILIAN SUGARCANE HARVEST IS ON THE RISE
Brazil's sugarcane production in the key centre-south region rose by 42% year on year in the first half of November to 26.5m tonnes, trade group Unica said. This brought total production so far this year to 481.9m tonnes,a 0.67% increase from the 478.7m tonnes produced in the sameperiod in 2011. The November production figure marked thefirst time this year that output jumped ahead of the 2011 harvest, Unica said.


EUROPE

SHELL'S FORCE MAJEURE ON STYRENE REMAINS
Following an unforeseen steam leakage at the Ellba propylene oxide/styrene monomer (PO/SM) plant in Moerdijk, the Netherlands, a joint venture between Shell Chemicals and Germany-based major BASF, the force majeure declared on styrene earlier in November remains in place, Shell said. Repair work on Shell's other PO/SM plant in Moerdijk, which went down on 5 November, has been completed as planned, the company said.

INEOS RESTARTS UK METHYLENE CHLORIDE UNIT
INEOS ChlorVinyls restarted its methylene chloride plant inRuncorn, the UK, early in the week of 19 November after a shutdown that lasted for approximately six weeks, a company source said. The producer began a one-month annual maintenance turnaround at the site duringthe weekend of 6-7 October,but the plant did not restart on schedule.

SYNTHOS TO OPEN RUBBER RESEARCH CENTRE
Polish synthetic rubber producer Synthos is creating a zlotych (Zl) 86m ($27.1m, €21.0m) research and development centre that will be half-funded by the EU. Located in the southern Polish town of Oswiecim, near Krakow, the Synthos Research & Development Centre for New Technologies will be backed with Zl 43m from the EU Operational Programme for the Innovative Economy. The main purpose of the centre will be the development of new types of synthetic rubber.

POLISH INDUSTRY PUSHES FOR GAS TARIFF REDUCTION
Last-minute lobbying efforts are under way to try to secure Poland's chemical industry a gas tariff reduction of far more than the 3.3% proposed by dominant supplier PGNiG, a source at the Polish Chamber of the Chemical Industry (PIPC) said. "It is a delicate matter at the moment, but given that PGNiG in early November won a substantial and unprecedented price cut on Russian gas exports of Gazprom, PIPC would like to think a meagre 3.3% is just not acceptable," the source said.

TURKEY'S PETKIM TO SHUT LDPE LINE IN DECEMBER
Turkish petrochemical producer Petkim is planning to carry out a scheduled maintenance at one of its two low density polyethylene (LDPE) lines in Aliaga, ?zmir Province, in the second week of December for two and a half weeks, a company source said at the GPCA annual meeting. The LDPE plant has two lines - 260,000 tonnes/year of autoclave technology and 90,000 tonnes/year of tubular technology. The larger line will be shut, while the smaller line will continue to operate during the turnaround, the source added.

GLOBAL FAME PRODUCTION TO DECREASE IN 2012
Global production of fatty acid methyl esters (FAME) - the most common type of biodiesel - is expected to show a decrease in 2012, Claus Keller, senior commodities analyst at F.O. Licht said. Although the total biodiesel production will continue toincrease, the market share of FAME will decrease in favourof hydrogenated vegetable oils (HVO), an alternative biodiesel, Keller said at the World Methanol Conference in Madrid.

LONZA TO DELAY LAYOFFS ANNOUNCEMENT
Swiss life sciences company Lonza is postponing announcement of any job cuts untilnext year, and will work towards keeping the number of layoffs as low as possible, after holding discussions with labour associations and unions. For individual work contracts, layoffs will not be announced before January 2013, while for collective work contracts, layoffs will not happen before March 2013.

TURKEY POLYOLEFINS SET TO GROW AT 16-18% IN 2012
Polyolefins in Turkey are expected to grow at a rate of 16-18% year on year in 2012, drivenby the expanding domestic market and export opportunities, a senior executive of Socar Turkey said at the GPCA annual meeting. "Turkey is second to China in terms of demand growth," Fatih Karakaya, commercial directorof Socar Turkey said. The Turkish government is targeting to reacha total export quantity of $500bn by 2023.

JACOBS WINS CONTRACT FOR ESTONIA SULPHUR UNIT
Jacobs has won a contract for work on a sulphur recovery unit (SRU) by Estonia's Viru Keemia Grupp (VKG). It said the unit will be part of VKG's investment to upgrade a shale oil refinery complex in Kothla-Jarve, Estonia. The US-based petrochemicals engineering firm will license its technology and will provide the basic design package, training, as well as commissioning services for the new SRU.

EUROZONE GDP TO SHRINK BY 0.1% IN 2013 - OECD
Eurozone GDP is likely to contract by 0.1% next year and expand by 1.3% in 2014 as part of a "hesitant" global economic recovery, according to the Organisation for Economic Co-operation and Development (OECD). According to the OECD's latest global outlook, a slow global recovery over the next two years is likely to be reversed if the eurozone fails to deal with its ongoing economic crisis.


By: Will Beacham
+44 20 8652 3214



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