News in brief

31 May 2013 09:32  [Source: ICB]

AMERICAS

FORMOSA PLASTICS SET TO EXPAND US MEG CAPACITY
Taiwan monoethylene glycol (MEG) producer Nan Ya Plastics, a subsidiary of Formosa Plastics, plans to expand its MEG capacity by 800,000 tonnes/year in the US by 2017, a company source said. The new MEG unit at Point Comfort, Texas, is part of Formosa Plastics' cracker and propane dehydrogenation (PDH) project announced in 2012. The producer recently revised its plan to increase the capacity of the ethane cracker to 1.2m tonnes/year. Derivative units also include a 300,000 tonne/year linear LDPE plant.

SAMSUNG BIDS FOR BOLIVIA ETHYLENE, PE PLANT DEAL
South Korea's Samsung Engineering will participate in the bidding process to construct an ethylene and polyethylene (PE) plant in the Gran Chaco, Bolivia's state-run oil company said. The bidding process will begin immediately after a conceptual engineering study has been submitted in June. The plant will have a production capacity of 600,000 tonnes/year of PE and will use 756,000 tonnes/year of ethane feedstock from the nearby Gran Chaco liquids separation plant. Operations are expected to begin in 2017.

MITSUBISHI PLASTICS BUYS UP PARTNER QUADRANT
Mitsubishi Plastics has acquired Quadrant Engineering Plastics for an undisclosed sum. With the deal, Quadrant becomes a fully-owned subsidiary of Mitsubishi Plastics. The companies had been in a partnership since 2009. Quadrant produces high-performance engineering plastics, including ultra-high-molecular-weight (UHMW) polyethylene (PE), nylon (or polyamide) and acetal. Its products are used for machined parts in food processing and packaging, semiconductor manufacturing, aerospace, electronics, chemical processing, life sciences, power generation and other industries.

TOTAL TO PAY $400M AMID IRAN BRIBERY ALLEGATIONS
French energy giant Total has agreed to pay nearly $400m (€312m) to resolve allegations that it violated US anti-corruption law by paying some $60m in bribes to Iranian officials between 1995 and 2004, the Department of Justice (DOJ) said. The department also said that French authorities are seeking criminal prosecution of Total chairman and CEO Christophe de Margerie and two other individuals for alleged violation of France's anti-bribery law and other statutes.

WILLIAMS, BOARDWALK JV TO MOVE US SHALE NGLS
Williams and Boardwalk Pipeline Partners are teaming up for a joint venture to build a pipeline to transport natural gas liquids (NGLs) from the Marcellus and Utica shale plays to petrochemical complexes on the US Gulf Coast and northeast. Dubbed the "Bluegrass Pipeline", phase one would transport 200,000 bbl/day of mixed NGLs from Ohio,West Virginia and Pennsylvania. Phase two would increase pipeline capacity to 400,000 bbl/day. The project could be placed into service by late 2015.

AIR PRODUCTS JV PLANS TO BUILD AND EXPAND IN CHILE
US industrial gas producer Air Products said its South American joint venture Indura is investing over $15m (€11.6m) in Chile to build a new plant in Antofagasta and expand capacity in Graneros. These new investments will meet the increasing demand for industrial gases in the northern and central regions of Chile, driven largely by the mining, metal fabrication and food industries, Air Products said. The Antofagasta plant will produce oxygen, nitrogen and argon. Capacity was not provided.

A SCHULMAN PLANS REJIG IN EUROPE, AUSTRALIA SALE
US plastic compounds and resins firm A Schulman announced further restructuring plans for its Europe assets, and it said it would sell a business in Australia. A Schulman said the restructuring in Europe, coming on top of earlier measures, should yield an additional $4m/year (€3m/year) in savings. Schulman added that the restructuring would result in job cuts, but did not say how many jobs will be affected.

A SCHULMAN AGREES TO BUY NETWORK POLYMERS
A Schulman, a supplier of high-performance plastic compounds and resins, said that it has agreed to acquire Network Polymers, a specialty compounder that makes resins for football helmets and other niche products. The merger is valued at about $50m (€38.5m). The transaction is expected to close in the next few months. Network Polymers, which deals in acrylonitrile-butadiene-styrene and polycarbonate and had 2012 revenues of $65.2m, is a leading single source provider of thermoplastic resins and alloys.

US ARO 150 TO BE BACK ON LINE BY END-JUNE - TOTAL
Total Petrochemicals said it expects its US aromatics 150 (ARO 150) production to be back on line by the end of June. The company declared force majeure on ARO 150 back in early May but did not specify the cause. The force majeure further strained an already tight ARO 150 market, specifically in the US Gulf, where demand has been strong from the agriculture sector.


EUROPE

BOROUGE 3 TO PRESSURE CEE POLYOLEFINS MAKERS
Olefin and polyolefin producers in central and eastern Europe (CEE) should prepare for pressure on prices stemming from the anticipated 2014 start-up of the 2.5m tonne/year Borouge 3 installations in Abu Dhabi, an analyst at Austria-based Raiffeisen Centrobank said. "Overall, the impact of Borouge 3 may be negative as regards margins, but in terms of volumes the CEE production should still be consumed in the region," he added. Borouge 3 is expected to raise Borouge's olefins and polyolefins capacity to around 4.5m tonnes/year from the current 2m tonnes/year.

SIBUR BEGINS PRODUCTION TRIAL FOR PP IN TOBOLSK
SIBUR has started trial production of the first polypropylene (PP) line at its polymer complex in Tobolsk, the Russia-based producer said. The PP plant in Tobolsk has the capacity to produce 500,000 tonnes/year. It will be the biggest in Russia and consists of two 250,000 tonne/year lines. The company added it has begun integrated equipment testing at the propylene storage facility in the same location.

FRANCE'S TOTAL TO CLOSE HDPE LINE AT ANTWERP
The capacity of Total Petrochemicals' high density polyethylene (HDPE) line to close in 2014 in Antwerp, Belgium, is 70,000 tonnes/year. Total announced the closure of the polyethylene (PE) line - the company's smallest and oldest at the site - as part of a modernisation programme (see page 10). Two weeks ago, LyondellBasell said it plans to shut down a 100,000 tonne/year HDPE unit in Germany in the third quarter, while Dow Chemical closed its 190,000 tonne/year HDPE plant in Belgium at the end of 2012.

SOLVAY BUSINESS HALTS NYLON 6,6 LINE IN FRANCE
Solvay Polyamide & Intermediates has suspended production of one of its three nylon 6,6 (or polyamide 6,6) lines at its Belle-Etoile site in Saint-Fons, France, because of poor macroeconomic conditions, the company said. The Belle-Etoile facility is dedicated to the manufacture of Solvay Polyamide & Intermediates' Stabamid product range. The line will remain shut down until macroeconomic conditions improve, the company said.

LINDE TO BUILD NEW JV AMMONIA PLANT IN RUSSIA
Germany's Linde Group said it has formed a joint venture with JSC KuibyshevAzot to build and operate an ammonia plant at the Russian chemical firm's Togliatti site in Samara region, in a deal worth around €275m. Both Linde and JSC KuibyshevAzot have an equal stake in the newly formed venture, Linde Nitrogen Togliatti. Construction work at the new plant in Russia, with a production capacity of 1,340 tonnes of ammonia/day, is scheduled to be completed in 2016.

GDF SUEZ BUYS 9% NABUCCO PIPELINE STAKE FROM OMV
OMV has sold a 9% stake in the Nabucco West pipeline project to French energy utility company GDF SUEZ for an undisclosed price, the Austrian oil, gas and petrochemicals group said. The divestment follows OMV's acquisition of a 16.7% stake in the gas pipeline project from German energy utility company RWE in mid-April, and leaves OMV still holding a 24.34% stake in Nabucco West.

GERMAN EVONIK LAUNCHES COMPOSITES R&D PROJECT
Germany-based Evonik Industries has launched a research and development (R&D) composites project house to develop new materials and system solutions for the lightweight construction sector, the specialty chemicals producer said. The composites project house is based primarily in Marl, with a branch in Darmstadt. Financial details of the project were not disclosed. The project house is run by Evonik's strategic research and development unit, Creavis.

DOW PLANS TURNAROUND FOR BOEHLEN ACRYLIC ACID
Dow Chemical is planning a four-week turnaround at its acrylic acid (AA) plant in Boehlen, Germany, for the middle of July, a source from the company said. The company has begun stockpiling ahead of the maintenance shutdown. Dow has an annual AA capacity of 80,000 tonnes/year, and can produce 40,000 tonnes/year of butyl acrylate from its Boehlen facility. AA and its esters are used in the manufacture of various plastics, coatings, adhesives and elastomers.

EU COMMERCIAL VEHICLE REGISTRATIONS UP IN APRIL
New registrations for commercial vehicles in the EU increased by 3.6% year on year in April - the first rise since December 2011 - mainly sustained by demand for new vans, according to the European Automobile Manufacturers' Association (ACEA). The industry body said the region counted on average two more working days during the period compared with the April last year, which would also account for the increase. "In absolute figures, the total number of registrations was about 100,000 units below the pre-crisis level recorded in April 2008," it added.


ASIA

KPC VIETNAM REFINERY AND PETCHEM PROJECT CLEARED
State-run Kuwait Petroleum Corporation's (KPC) board of directors has given the go-ahead to set up a $9.2bn oil refinery and petrochemical complex in Vietnam. "The board, which met yesterday (Monday), has agreed to proceed with the project," said a senior official of KPC, asking not to be named. "KPC will inject around $3.2bn, equivalent to about 35% of the project, while three other companies, two of them Japanese and one Vietnamese, will have different proportions of equity financing," he added.

BASF-YPC PLAN TO EXPAND EO, BUILD CHINA NPG PLANT
BASF and China's SINOPEC plan to increase the capacity of their joint venture ethylene oxide (EO) plant in Nanjing, China, and to set up a new neopentylglycol (NPG) plant. The 50-50 joint venture, BASF-YPC Co, will raise the existing 330,00 tonnes/year capacity of the EO unit. The capacity of its acrylic acid value chain with more acrylic acid and butyl acrylate will also be increased by 2014.

PCS TO SHUT NO 1 CRACKER FOR TURNAROUND IN JUNE
The Petrochemical Corporation of Singapore (PCS) was on track to shut its 450,000 tonne/year No 1 naphtha cracker at Ayer Merbau in Jurong Island on 29 May for a turnaround the following week. The cracker is expected to be shut until mid-July. PCS also runs a 650,000 tonne/year No 2 naphtha cracker at the same site. Both crackers are operating at an average rate of around 90% capacity in May, unchanged from April's levels.

DONGYING HUALIAN ENDS SEVEN-YEAR BITUMEN HALT
China's Dongying Hualian Petrochemical resumed bitumen production at its 1.2m tonne/year crude distillation unit (CDU) at Dongying in Shandong province on 25 May after a seven-year halt. Before the restart of bitumen production, the company was producing petroleum coke and distillates to enjoy better margins. The producer switched back to producing bitumen, because the distillates markets have been extremely weak this year. Dongying Hualian is using Merey crude as the feedstock to produce AH-70 bitumen.

MITSUI CHEMS TO RAMP UP OSAKA CRACKER RUN RATE
Japan's Mitsui Chemicals plans to raise the operating rate of its 450,000 tonne/year Osaka-based cracker in June because of an impending turnaround at its Chiba cracker in the same month. The 617,000 tonne/year naphtha cracker in Chiba is scheduled for a turnaround from 20 June to 7 August. The Osaka cracker is currently running at 80-85% capacity, similar to the operating rate of its Chiba cracker.

SEP START-UP FOR NINGXIA YOUNGLIGHT ENERGY VAM
China's Ningxia Younglight Energy Chemical plans to start up its 450,000 tonne/year vinyl acetate monomer (VAM) plant at Yinchuan in September. The carbide-based plant in Ningxia province was initially scheduled to go on stream in the first quarter of 2013. The company also plans to start up a downstream polyvinyl alcohol (PVOH) plant and a 200,000 tonne/year 1,4-butanediol (BDO) plant at the same time.

SHANXI HUOJIA CHEMICAL BEGINS PVC TURNAROUND
China-based Shanxi Huojia Chemical shut its 160,000 tonne/year polyvinyl chloride (PVC) plant at Changzhi in Shanxi province on 29 May for one week of maintenance. The company was running the plant at 60-70% of capacity before the shutdown. The maintenance shutdown of the plant is expected to have little impact on the local market given its small capacity in north China.

YISHENG DAHUA DALIAN PTA NO 2 PLANT SHUTS DOWN
China's Yisheng Dahua Petrochemical shut down its 3.3m tonne/year No 2 purified terephthalic acid (PTA) unit in Dalian on 27 May. The unit will be off line for 10 days, the source said without specifying the reason. Prior to the shutdown, the plant was operating at 70% of capacity since 1 May. Yisheng Dahua's 2.2m tonne/year No 1 PTA unit, on the other hand, was taken off line for a week from 17 May.

SHANDONG HAILI CHEMICAL TO SHUT JIANGSU ECH PLANT
China's major epichlorohydrin (ECH) producer, Shandong Haili Chemical Industry, plans to shut its 130,000 tonne/year ECH plant in Jiangsu province before end-May for regular maintenance. Maintenance for the ECH plant will last for around 10 days. The impact on market supply is expected to be minimal, as the producer will run its 320,000 tonne/year ECH plant in Zibo at full capacity during the Jiangsu shutdown.

MITSUBISHI CHEM TO SHUT MIBK UNIT FOR OVERHAUL
Japan's Mitsubishi Chemical plans to shut its 20,000 tonne/year methyl isobutyl ketone (MIBK) plant in Mizushima from early June for an annual turnaround. The plant will undergo annual maintenance from 8 June to 12 July. In 2012, the company shut its MIBK plant for maintenance between 13 June and 15 July. Mitsubishi Chemical is one of three MIBK makers in Japan.


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