CPC Corp. in talks to procure propylene and ethylene from Formosa

(Dow Jones) -- CPC Corp. is in talks to procure base petrochemicals, such as propylene and ethylene, from Formosa Petrochemical Corp (6505.TW) to ensure future supply as a CPC 23-million metric ton-a-year naphtha cracker is set to close in the first quarter for a year-long capacity upgrade, senior executives from the companies said Monday.

Formosa Petrochemical President Tsao Mihn said the deal between the two rivals, which will likely take more than a month to conclude, will help expand distribution channels and lift the utilization of Formosa's olefin plants by 3%-4% amid a weakening export market. The resulting on-unit cost reduction will help boost Formosa's bottom line, since the refiner has idle capacity, analysts said.

CPC's petrochemical business division Deputy Executive Manager Vincent Lin said sourcing from Formosa, instead of importing from overseas suppliers as it's doing now, will help the state-owned refiner save on shipping and storage and will lower the overall feedstock costs for its downstream customers, which are also facing a sputtering end-demand and a squeeze in margins.

The supply deal also highlights closer ties between the two major energy companies in Taiwan, after some senior executives from CPC were hired by Formosa over the past months, in a bid to turn around its industrial safety image, following a spate of fires at a major Formosa petrochemical plant this year.

"The deal could benefit both sides," Formosa's Tsao said, "as Formosa Petrochemical can sell at prices higher than spots, CPC's downstream customers can get feedstock at prices lower than imports and CPC can make profit on consolidating those deals."

CPC's Lin added that the refiner is sourcing around 20%-30% of the base petrochemicals it needs from overseas suppliers. But he said the deal with Formosa, if struck, is unlikely to fill the whole gap because Formosa has to supply its other customers as well.


Rochling took over the Italian machining specialist Leder Orago

(Rochling) -- The Rochling Engineering Plastics Group is taking over the North Italian machining specialist Leder Orago S.r.l. in Gozzano effective as of the 1st December 2011. Leder Orago will become part of the Business Unit Machined Components of the Rochling High-Performance Plastics Group, which operates 15 machining facilities world-wide. With the take-over, Rochling raises their competence in the field of plastic applications, material development as well as machining.

The enterprise Leder Orago S.r.l. at the location in Gozzano, where 46 employees generate a turnover of approx. Euro 5.0 million, has been steadily developing in the last few years. Willy Bolscher, Director of the Business Unit Machined Components, is positive about the acquisition: "Leder Orago represents for us a good platform for further expanding our business in Italy. The good technical equipment of the company as well as the high degree of competence of management and the staff offer a very good basis for further future growth."

With the company Rochling Machined Plastics S.r.l. in Arcisate, Rochling has had a machining operation for thermoplastics and composites at their disposal in Italy since 1994, and with the further commitment signalises sustainable interest in the Italian market. Bolscher: "With a global market share of more than seven percent, Italy is the fourth largest manufacturer of mechanical engineering products in the world and thus for us an important sales market for machined components made of plastic."


BorSafe HE3490-LS to deliver longevity to Estonian power plant pipes

(Borealis) -- Durability and efficiency were the determining factors behind the choice of PE100 BorSafe HE3490-LS from Borealis, a leading provider of chemical and innovative plastics solutions, for renovation of a crucial cooling water circulation system at the world's two biggest oil shale-fired thermal power plants.

Estonian Energy, referred to locally as ⌠Eesti Energia, owns and operates the large production facilities at Narva, close to Estonia's northeast border with Russia. The Narva thermal power plants have a power generating capacity in excess of 2,300MW. Estonia Energy is the leading electrical energy producer in Estonia, one of the largest providers in the Baltic region and an exporter of electricity to the Nordic power market.

Upon discovering extensive pipe corrosion in the system as part of an ongoing improvement programme at Narva, Estonia Energy turned to independent Estonia-based specialist plastic pipe producer Krah Pipes OU to upgrade the approximately 40-year-old steel cooling water pipes. The old pipes did not have a Borealis coating and were not made of Borealis material.

Key requirements for the new network, involving two parallel pipelines running from a pumping station to the plants' turbine room, were safety and the reduced maintenance of leak-free pipes with a minimum 30-year service life. Speed and flexibility of installation were particularly important to avoid significant power generating downtime and major cost penalties.

Borealis' bimodal HDPE BorSafe HE3490-LS was identified as the pipe material offering the optimum balance of properties to meet the project's criteria. The high performance PE100 material, classified MRS 10 and on the positive list of the PE100+ Association, exceeds the reference standard for the production of these pipes. It has become the reference material for many industrial pipe and pipe relining projects globally.


Chemicals and industrial production in Europe fell in October

(ICIS) -- EU chemicals and industrial production fell in October as demand was hit by the continuing eurozone debt crisis, data from statistics agency Eurostat showed on Wednesday. EU chemicals production was down by 0.8% in October compared with September, with a 1.2% decline in the 17-member eurozone.

Year on year, chemicals production in October, adjusted for the number of working days in each period, was 2.1% lower in the 27-member EU and down by 3.2% in the eurozone.

Industrial production in the EU was down by 0.2% month on month in October, and fell by 0.1% in the eurozone, Eurostat said. In September, production had decreased by 2.0% and 1.5% month on month, respectively.

In October 2011 compared with October 2010, industrial production increased by 1.3% in both zones.

Production of energy in October fell by 0.6% in the EU and by 0.9% in the eurozone, compared with September. The production of intermediate goods and durable consumer goods also dropped month on month.


The forecast for world oil demand growth in 2012 was revised

(ICIS) -- The forecast for world oil demand growth in 2012 has been revised down by 100,000 bbl/day to 1.1m bbl/day, because of a slowdown in the global economy, OPEC said on Tuesday.
Global oil demand in 2012 is now expected to average 88.9m bbl/day, said OPEC. Economic uncertainty has spilled over to non-Organisation for Economic Cooperation and Development (OECD) countries following the eurozone debt crisis, which has negatively impacted world oil demand, it added.

⌠In 2011, the global economy entered a phase of increased uncertainty. While underlying demand in the real economy has improved, the outlook has weakened over the course of the year, OPEC said in its December monthly oil market report. "This was mainly due to the sovereign debt crisis in the eurozone, persistently high unemployment in the advanced economies, and inflation risk in the emerging economies," it added.

OPEC said that the negative economic turbulence is affecting China, the second-largest oil consumer in the world. ⌠Slow oil demand, initiated in the OECD region, has moved to China and India, leading to a new downward revision of 100,000 bbl/day in next year's oil demand growth forecast, said OPEC.

OPEC said retail petroleum prices are also negatively affecting oil demand across the globe. ⌠The new downward revision is not restricted to the OECD region only, but is spreading to the non-OECD region as well. The transportation and industrial sectors are the ones most affected," it added.
OPEC said the use of oil in both sectors is noticeably slowing down worldwide.