News in brief

15 March 2013 09:15  [Source: ICB]

AMERICAS

LYONDELLBASELL PLANS TEXAS ETHYLENE EXPANSION
LyondellBasell plans to add an additional 800m lb/year (363,000 tonnes/year) of ethylene capacity at its cracker at Corpus Christi, Texas, by late 2015, said Tim Roberts, senior vice president of olefins and polyolefins - Americas. This investment of around $420m (€323m) could add $250m-300m in annual potential growth value. Currently, LyondellBasell has an ethylene capacity of 771,000 tonnes/year at Corpus Christi.

SHAREHOLDERS APPROVE POLYONE'S SPARTECH BUY
Shareholders of US-based plastic sheet, compounds and packaging solutions producer Spartech have approved its acquisition by PolyOne, the US formulator announced. Spartech's colour and specialty compounds business will be integrated with PolyOne's global colour, additives and inks segment and its global specialty-engineered materials and performance products and solutions segment. The Spartech name will no longer be used. Announced in October 2012, the transaction was due to complete on 13 March.

CHS SET TO BOOST KANSAS REFINING CAPACITY BY 18%
US farm and refining co-operative CHS will spend $327m (€252m) to expand the capacity of its McPherson refinery in Kansas, the company said. The expansion will add 15,000 bbl/day to the 85,000 bbl/day refinery, and begin this spring with phased completions in the second half of 2015 and 2016. The project will take place at the same time as the construction of a replacement coker already in progress, CHS said. The McPherson refinery will continue to operate normally during both projects.

ENTERPRISE PLANS GULF COAST ETHANE PIPELINE
Enterprise Products plans to develop a new 270-mile ethane pipeline system to supply petrochemical plants in the US Gulf Coast region, the US midstream energy firm said. Enterprise received transportation commitments from shippers to support development of its Aegis Pipeline, which will originate at the company's liquids storage complex at Mont Belvieu near Houston. Aegis is expected to begin commercial operations in 2014.

ZEACHEM MAKES ETHANOL, CELLULOSIC CHEMICALS
US biorefiner ZeaChem has produced commercial-grade cellulosic chemicals and ethanol from woody biomass and agricultural residue, bringing it one step closer to large-scale production, the company said. ZeaChem is developing a 25m gal/year commercial biorefinery next to its 250,000 gal/year integrated demonstration biorefinery at the port of Morrow in Boardman, Oregon. Development of the commercial biorefinery is under way, supported by a loan guarantee from the US Department of Agriculture. The company did not give a timetable for the commercial project's completion or start-up.

ARGENTINE COURT SHUTS PETROBRAS REFINERY
Petrobras said its Argentine subsidiary has been ordered by the Second Civil Court of Bahia Blanca, Argentina, to close its refinery. The court ordered the closure of the refinery, which Petrobras has for sale, because of environmental problems and licence irregularities, a source familiar with the situation said. The Brazilian oil giant has submitted an appeal to the court. Petrobras is said to have begun the shutdown of the 31,000 bbl/day refinery on 8 March.

POWER CUT SHUTS PHILLIPS 66 REFINERY AT SWEENY
The restart after a power outage at Phillips 66's Sweeny refinery in Texas will take several days, refinery spokesman Richard Johnson said. A loss of power from a third-party power supplier on 10 March, resulted in a temporary shutdown of the 247,000 bbl/day refinery. A filing with the Texas Commission on Environmental Quality (TCEQ) said the power interruption was triggered by Texas New Mexico power supply failure.

SHELL EXTINGUISHES FIRE AT DEER PARK REFINERY
Shell extinguished a small fire at its Deer Park refinery in Texas on 9 March, company spokeswoman Kimberly Windon said. The fire occurred early morning and was quickly extinguished by site emergency responders at the 340,000 bbl/day refinery. There were no injuries and no impacts to the community. The cause of the incident will be investigated.

HUNTSMAN COMPLETES DELAYED CRACKER START-UP
US producer Huntsman has restarted its Port Neches cracker in Texas after a longer-than-expected shutdown, sources said. The restart process began on 8 March, and the company was still working to return to full operating rates. The 193,000 tonne/year cracker was shut down for maintenance in early January, after which initial efforts to restart it were unsuccessful. According to a filing with the Texas Commission on Environmental Quality (TCEQ), Huntsman experienced equipment issues at its A3 unit on 25 February.

WESTLAKE BEGINS RESTART AT LOUISIANA CRACKER
Westlake Chemical has begun the restart process at its Lake Charles cracker in Louisiana, a company spokesman said. The company's 699,000 tonne/year Petro 2 cracker was shut down in early January for a 45-60 day turnaround. The spokesman said the cracker should be able to run at full rates in mid-March.


ASIA

INEOS INVESTS BIG IN CHINA WITH SINOPEC CHEMS JV
INEOS is to make its largest-ever investment in China through a joint venture with state petrochemical group Sinopec to develop a 1.2m tonne/year cumene, phenol and acetone facility, the Switzerland-headquartered chemicals company said. INEOS said the project cost would be around $500m (€385m). The joint venture agreement covers plans to design, build and operate a facility at the Nanjing Chemical Industrial Park in Jiangsu, China. The facility will have an annual capacity of 400,000 tonnes of phenol, 250,000 tonnes of acetone and 550,000 tonnes of cumene, and is expected to be completed by the end of 2015.

THAILAND'S PTTGC TO BUILD COMPLEX WITH PERTAMINA
Thailand's PTT Global Chemical (PTTGC) has been selected by Indonesian state-controlled refining firm Pertamina to jointly build a world-scale petrochemical complex in Indonesia that will include a 1m tonne/year cracker. The project, to be sited on Java island, will also include downstream polymer units, PTTGC said in a statement. The two firms expect to signed a heads of agreement in early April 2013 and will set up a joint venture at the end of this year with the aim of starting up operations by 2017, it said.

GERMAN FIRM TO DEVELOP PROJECT IN INDONESIA
German engineering firm Ferrostaal has signed a letter of intent with the Indonesian government to develop a new petrochemical complex in the West Papua region of Indonesia. The project will be able to produce methanol, propylene and polypropylene (PP) from natural gas and is expected to go into production in the Teluk Bintuni regency in 2019. Once completed, the complex is expected to produce around 400,000 tonnes/year of PP, according to Ferrostaal.

INDIA SELLS RASHTRIYA CHEMICALS & FERTS SHARES
India's government has raised around India rupees (Rs) 3.1bn ($56.8m) through the sale of a 12.5% stake in Rashtriya Chemicals and Fertilizers (RCF), according to an announcement on India's Bombay Stock Exchange (BSE). Following the sale of the shares the government's shareholding in the company will be reduced to 80%. The divestment is part of a government campaign of fundraising and deficit reduction through the sale of partial stakes in state-owned companies.

ASAHI KASEI PLANS MAY MAINTENANCE AT ADA UNIT
Japan's Asahi Kasei will shut its 120,000 tonne/year adipic acid (ADA) plant at Nobeoka in Miyazaki prefecture in early May for a scheduled turnaround, a company source said. The plant will be shut around 7 May and the restart is expected to be around early June, the source said. The plant is running at around 90% capacity currently and the company is building stocks ahead of the major annual shutdown, according to the source.

JILIN PETROCHEMICAL TO CAP MIBK RUN RATE AT 70%
China's Jilin Petrochemical plans to cap the operating rate at its 15,000 tonne/year methyl isobutyl ketone (MIBK) plant at Jilin in northeastern China at 70% capacity "in the near term", a company source said. The producer cut its MIBK output from full capacity in early March, because of mounting inventories resulting from slow downstream demand against a backdrop of rising imports, the source said.

CHINA'S LUXI HITS ON-SPEC BUTANOL AT NEW PLANT
China's Luxi Chemical has achieved on-spec butanol products at its 250,000 tonne/year butanol/ethylhexanol plant at Liaocheng in Shandong province, a company source said. The plant's ethylhexanol line will be started up soon, according to a company statement to the Shenzhen Stock Exchange. A company source previously said that the plant would be able to produce 140,000 tonnes/year of 2-ethylhexanol (2-EH), 85,000 tonnes/year of n-butanol (NBA) unit and 25,000 tonnes/year of isobutanol (IBA).

HANWHA CHEMICAL DELAYS OXO PLANT TURNAROUND
South Korea's Hanwha Chemical has postponed the annual maintenance for its oxo-alcohols plant in Yeosu from early March to end of the month, a company source said. The unit, which has a nameplate capacity of 110,000 tonne/year of 2-ethylhexanol (2-EH) and 10,000 tonne/year of n-butanol (NBA) will be off line for only one week from end-March, the source added.

CNOOC TO COMMISSION ZHUHAI LNG IN END-JUNE
China National Offshore Oil Corp (CNOOC) is expected to commission its 3.5m tonne/year liquefied natural gas (LNG) terminal at Zhuhai in Guangdong province on 30 June, when the terminal receives its first cargo, a company source said. The project is operated by Guangdong Zhuhai Jinwan LNG, a subsidiary of CNOOC. The terminal will undergo two to three months of trial runs before it starts commercial operations, the source said.


EUROPE

EVONIK OWNERS PLACE SHARES WITH INVESTORS
Evonik Industries' owners RAG Foundation and private equity firm CVC Capital Partners have placed further shares of the Germany-based specialty chemicals producer with institutional investors, ahead of a contemplated listing on the Frankfurt Stock Exchange. The companies said they have privately placed a stake of less than 10% of Evonik with selected German and international institutional investors. The two companies had agreed to sell a stake of just below 5% for about €600m ($779m) to Temasek, German newspaper Wirtschaftswoche said, citing unnamed RAG sources.

US CHEVRON TARGETS SHALE GAS IN CENTRAL EUROPE
Chevron plans to add to its shale gas acreage in central and eastern Europe as it aims to undertake more drilling in Poland and Romania, an executive for the US-based energy major said. "We accumulated quite an acreage position, with close to 4m acres [1.6m ha] now under contract, and we are negotiating for another approximately 3m acres along the geological trend we see running through central and eastern Europe," said Jay Johnson, head of Chevron's exploration and production business in Europe and the Middle East. "We expect to drill additional wells this year in Poland, as well as Romania," he added.

EUROPE NEEDS COMMON SHALE GAS POLICY - OMV
Europe's petrochemical industry is at risk of being undermined by the shale gas boom in the US and the EU's failure to adopt a common policy to cover the exploitation of shale gas in member states, Austria's OMV said. CEO Gerhard Roiss has set out to make it clear to EU officials that Europe could be threatened by "deindustrialisation" if it did not quickly deal with the impact of the US's shale gas success, which has given its industries access to cheap gas, with a much stronger position.

BASF ACQUIRES PART OF CIECH'S TDI BUSINESS
BASF has completed the acquisition of sections of the toluene diisocyanate (TDI) business of Polish state chemicals group Ciech, the Germany-based petrochemicals giant said on Monday. The deal, which was announced in October 2012 and approved in February this year, does not include the TDI production facility of Ciech subsidiary Zachem. However, Zachem ceased TDI production in late December 2012 due to a non-competition clause embedded into the BASF-Ciech deal.

TURKEY'S PETKIM EXCEEDS $1BN EXPORT BARRIER
Turkish petrochemical producer Petkim met its target of achieving an annual export value of more than $1bn in 2012, the first time in its 48-year history. Products worth $1.04bn were exported in 2012 compared to $0.83bn in 2011, while sales volumes increased by 3.6% year on year to reach 1.81m tonnes. Petkim succeeded in meeting its objective by expanding sales into new markets, it said.

AKZONOBEL, SOLVAY JOIN UP FOR RENEWABLE SOLVENTS
Solvay is to collaborate with AkzoNobel to "significantly increase" the usage of renewable raw materials and bio-based chemicals within the France-based chemicals company's paints and coatings. The first partnership of its kind for AkzoNobel, the agreement concerns the incorporation of bio-butanol, bio-acetone and associated derivatives into the company's products, as well as renewable materials-based solvents.

GERMANY'S EVONIK LOOKS TO HIGHER SALES IN 2013
Evonik Industries expects sales to be higher in 2013 on the back of new production capacities and rising demand, the Germany-based specialty chemicals major said. The company added that operating results for the full year should be in line with the levels reported in 2012. Evonik's 2012 fourth-quarter net income rose 86% year on year to €276m despite a fall in sales "due to tax effects." Group sales for the three months ended 31 December slipped by 2% year on year to €3.27bn.

NET PROFIT DOWN 38.5% AT GURIT AS OP PROFIT SLUMPS
Gurit's net profit fell by 39% year on year to Swiss francs (Swfr) 13.7m in 2012 as its operating profit slumped on the back of restructuring charges, while the firm's net sales rose by 1.8% year on year to Swfr351m in 2012. Gurit's operating profit was hit by restructuring charges amounting to Swfr12m after it was forced to mothball its prepreg output in Canada as well as China and reduce its workforce by some 150 people, it said.

ROSNEFT OFFERS NAPHTHA FOR MAY-OCT SUPPLY
Russia's Rosneft is offering by tender 1.9m tonnes of naphtha for loading from May to October this year. The company is offering 1.2m tonnes of naphtha from Tuapse; 300,000 tonnes from Vanino; and 400,000 tonnes from Nakhoda. Rosneft last sold by tender a total of 2.16m tonnes of naphtha for supply from November 2012 to April 2013.

UBS RAISES TARGET PRICE OF DOWNGRADED ELEMENTIS
UBS has downgraded UK-based Elementis' stock to "Neutral" from "Buy", as it cut the group's 2013 earnings per share (EPS) by 1% on changes to its employee benefits scheme, which management estimates will have negative impact on profit before tax. However, the Swiss-based investment bank raised the specialty chemicals producer's 12-month target price to $3.97 from $3.63.

EUROPE FIRST-GENERATION BIODIESEL PRODUCTION TO END BY 2020 - CEO
European first-generation biodiesel production will end between 2017 and 2020, as policy support evaporates for the industry, an executive said. The grim outlook was delivered by Kevin McGeeney, CEO of Switzerland-based commodity broker Starsupply, speaking at the World Biofuels Markets conference in Rotterdam, the Netherlands. "A lot of people are turning their backs on biodiesel and biofuels in general, and the reasons are food vs. fuel and [indirect land use change]. Those are the essential reasons that come up again and again," McGeeney said.

SUSANNE KLATTEN ELECTED SGL GROUP'S NEW CHAIRWOMAN
SGL Group's supervisory board has elected entrepreneur Susanne Klatten to be its new chairwoman, the German carbon products manufacturer said. Klatten, who has been a member of the supervisory board since 2009, will take over from Max Dietrich Kley, whose term ends at this year's annual general meeting on 30 April. Klatten's investment company SKion holds around 28% of the shares in SGL Group. SGL Carbon has operated on the market as SGL Group - The Carbon Company since March 2007.

FLINT HILLS RESTARTS CRACKER AFTER OUTAGE
US producer Flint Hills Resources has restarted its Port Arthur cracker in Texas, sources. The unit was taken off line on 1 March because of an unexpected shutdown of the ethylene and propylene refrigeration compressor at the facility's light olefins unit (LOU), according to a filing with the Texas Commission on Environmental Quality (TCEQ). The company made an additional filing later that week, saying an unexpected shutdown in the cracked-gas compressor in the LOU on 4 March resulted in emissions of several hydrocarbons.

MEXICO'S PEMEX TO SHUT HDPE ASAHI PLANT FOR MAINTENANCE ON 6 APRIL
Mexico's sole polyethylene producer Pemex will stop operations at its 100,000 tonnes/year high density polyethylene (HDPE) Asahi plant on 6 April for programmed maintenance, a company source said. The Asahi plant produces HDPE injection grades. The plant's production train A will stop operating on 6 April and maintenance is expected to last 60 days. Maintenance will consist of replacing the entire extruder of the plant. Pemex also plans to perform a similar procedure on its 80,000 tonne/year Mitsui plant, which is used for the production of HDPE blow-moulding material.

GERMANY'S BRENNTAG TO ACQUIRE US LUBRICANTS DISTRIBUTOR
Germany-headquartered chemicals distributor Brenntag said it has agreed to acquire the assets of US-based Lubrication Services (LSi). Headquartered in Oklahoma City, Oklahoma, LSi distributes lubricants and chemicals and serves the oil and gas industry. LSi will allow Brenntag to increase its participation in rapid growth related to shale plays. The investrment amount will be $42m (€32.3m), Brenntag said. The acquisition is subject to closing conditions and is expected to be completed over the next weeks.

BASF, SHELL TO PAY MORE THAN $100M IN BRAZIL TOXIC EXPOSURE CASE
Anglo-Dutch oil company Shell and German chemical company BASF have agreed to pay Brazilian reais (R) 200m ($102m) as compensation for former pesticides plant employees' exposure to toxic chemicals, Brazil's labour ministry (MPT) said. Under the agreement, BASF and Shell will pay for collective moral damages to the former plant workers in Paulinia, Sao Paulo. They will receive lifetime medical assistance and other compensation for personal and material damages. MPT said the text of the agreement must be written within 10 days, effective on 11 March.

VALE DECIDES TO SUSPEND POTASH PROJECT IN ARGENTINA
Unable to gain desired tax breaks for its $5.9bn (€4.5bn) Rio Colorado potash facility in Argentina, Brazil mining company Vale SA announced that it has informed the government that it is suspending implementation of the project. On suspension since January, the project was expected to begin production in the second half of 2014, with initial output estimated at 2.4m tonnes. Citing the economic conditions, it decided that the Rio Colorado was not in line with the company's commitment to capital allocation and value creation.

CELANESE TO TEST RUN NEW NANJING ETHANOL PLANT IN APRIL - SOURCES
US-based Celanese plans to begin trial production at its new 275,000 tonne/year ethanol plant in Nanjing, China, by the first half of April, according to market sources. "They will begin trial run at the ethanol plant in the first half of April for a duration of two to three months because it is based on new technology," a China-based source said. Celanese did not immediately respond to a request for comment.


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