Shale gas boosts Exxon Ethylene

(businessweek) -- North America’s shale boom is prompting the biggest expansion of natural gas-fed petrochemical plants in 15 years, helping Exxon Mobil Corp.beat Mitsubishi Chemical Holdings Corp. with raw materials that are half the price of the oil product used in Asia.

Hydraulic fracturing of shale rock formations, known as fracking, is giving U.S. chemical makers an edge in making ethylene, a building block in everything from plastics to antifreeze. Record gas production has driven down the cost of ethane, a component that’s converted to ethylene, by 60 % this year and prompted Japan to shut units running on oil-based naphtha that’s up 2 %.

Exxon Mobil and Westlake Chemical Corp. are among companies building ethane-fed plants to benefit from shale output that cut gas prices by about 75 percent since 2008. Mitsubishi plans to shut an ethylene unit, partly blaming the “emergence of shale gas” in North America, while Mitsui Chemicals Inc. also anticipates cutbacks. Closures may spread to South Korea and Taiwan, according to Credit Suisse Group AG.

Gas liquids, mostly ethane, supply about 85 %of feedstock for U.S. ethylene makers. Almost all plants in Northeast Asia use naphtha.

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(technip) -- Technip was awarded by The Dow Chemical Company the front-end engineering and design (FEED) contract and cracking furnaces engineering and procurement services for a previously announced new large world-scale ethylene production plant to be located at Dow Texas Operations in Freeport, Texas. The Dow Chemical Company is the largest ethylene-based chemical producer in the world.

The new facility will be based on low-cost ethane feedstock. The products from the new plant will be utilized for Dow’s downstream facilities in the Gulf Coast in Texas and Louisiana. Texas Operations is Dow's largest integrated manufacturing site worldwide and the largest single-company chemical complex in North America.

Technip’s operating center in Claremont, California, will execute this contract. The FEED activities are targeted for completion in mid-2013.

Technip and its top management are appreciative of The Dow Chemical Company’s confidence in its capabilities and Technip is committed to providing the FEED services for the new ethylene plant of quality equal to or better than Dow’s expectations.
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(news.szenergy) -- Demand for naphtha from China’s ethylene sector will continue to grow over the next three years but its dominance in the overall feedstock mix will slip, as per a Sinopec official. Naphtha’s dominance in the overall feedstock mix is expected to drop to around 65% by 2015.

Naphtha is primarily used for ethylene production in China, currently accounting for 70% of the total feedstock used in ethylene plants. China currently has ethylene production capacity of 15.2 mln tpa and an additional 1.93 mln tpa capacity is slated to be ready by the end of the current five-year economic plan in 2015. Some of these new plants will use mostly naphtha, but producers are also finding cheaper alternatives for feedstock like synthetic coal gas and coal-to-liquids. Hence, while naphtha demand will continue to grow, the pace of growth will be slower than in the last few years.

Ethylene consumption in 2012 is likely to rise 3.8% to 32.5 mln mt, slowing from the almost 5% growth seen last year. Next year production is likely to rise to 17 mln mt due to new capacity coming online. Sinopec and CNPC are each planning two new ethylene plants, while a number of existing plants have been earmarked for upgrades. Sinopec’s greenfield projects in Wuhan, Hubei province and Chengdu in Sichuan province will use naphtha as feedstock.
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(BASF) -- After a solid first half, BASF maintained good business performance overall in the third quarter. Sales rose by 8% to EURO19 billion, particularly due to higher volumes. At just under EURO2.1 billion, income from operations (EBIT) before special items was 5% above the level of the third quarter of 2011. The higher contribution from the Oil & Gas and Agricultural Solutions segments more than offset lower earnings in the chemicals business (which comprises the Chemicals, Plastics, Performance Products and Functional Solutions segments).

The company has adjusted some of its expectations for the global economy (previous forecast in parentheses):
growth of gross domestic product: 2.2% (2.3%); growth in industrial production: 2.8% (3.4%); growth in chemical production: 2.9% (3.5%).

BASF does not anticipate an upturn in the global economy or in demand in its chemicals business for the fourth quarter of 2012. Yet, the company still aims to exceed the 2011 record levels in sales and EBIT before special items, according to Dr. Kurt Bock, Chairman of the Board of Executive Directors of BASF SE.

BASF SE is the largest diversified chemical company in the world and is headquartered in Ludwigshafen, Germany. BASF produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.
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(plastemart) -- PolyOne, polymer compounder and distributor, has bought Spartech Corp. The transaction is valued at about USD393 mln including assumption of Spartech’s net debt of USD142 mln. By this aquistion, PolyOne intend to turn Spartech's businesses into higher value added operations.

Spartech has a presence in aerospace and security markets, ones in which PolyOne wants to expand. Spartech’s aerospace and security markets are wedded to its cast acrylic and PVC multilayer sheet operations for applications such as aircraft windows and canopies, bullet-resistant armor for banks, and aircraft interior components. These operations, however, are small compared with Spartech’s predominant commodity sheet business of filled polypropylene. Along with its aerospace and security products, Spartech makes consumer and medical packaging products. It makes plastic sheet, specialty film laminates, specialty plastic alloys, color concentrates and blended resin compounds and has annual revenues of about USD1.2 bln.

PolyOne Corporation is a global leader offering a comprehensive array of specialized polymer materials, tailored services and end-to-end solutions.
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