Saudi JV to build world largest butanol plant

(4-trader) -- Saudi Kayan, Sadara Chemical and Saudi Acrylic Acid Company (SAAC) have joined forces to establish a new company, which will build the first butanol plant in the Middle East and the largest in the world.

The Saudi Butanol Company, which will produce butanol to support the growth of the paints and coatings industry in Saudi Arabia, will be located at Tasnee Petrochemicals Complex in Jubail Industrial City and operated by Tasnee.

The new plant is scheduled to go on-stream in the first quarter of 2015. It will open new job opportunities of around 200 direct and indirect positions for Saudi citizens.

Under the agreement, the three partners will have equal stake in the production quantities for downstream use or for sales in the local and overseas markets.

The design capacity of the plant is 330,000 metric tons per annum of n-butanol and 11,000 metric tons per annum of iso-butanol. Sabic will be marketing the Saudi Kayan share of the butanol plant along with the excess material of SAAC. The estimated total cost of the project is SR1,939 million (USD517 million).

Saudi Kayan Petrochemical Company is a manufacturing affiliate of the Saudi Basic Industries Corporation (Sabic), while Sadara Chemical Company is a joint venture developed by Saudi Arabian Oil Company (Saudi Aramco) and The Dow Chemical Company.

Saudi Acrylic Acid Company (SAAC) is an affiliate of National Industrialization Company (Tasnee) and Sahara Petrochemicals Company.

Sinopec, ConocoPhillips to study Chinese shale

(upstreamonline) -- ConocoPhillips has joined up with Sinopec to explore for shale gas in China as the country grapples with the best way to exploit its potentially significant unconventional resources, the US player said.

This marks the official entrance of a third major international oil company into China's shale gas industry. Shell signed a similar agreement in 2009 with PetroChina before it green-lighted a more formal production sharing contract in March.

Chevron signed a joint study agreement with Sinopec in April 2011 and began initial drilling in the first quarter.

Other international oil majors such as BP and Total have said they are studying similar agreements, but have yet to announce any partnerships.

The Chinese government has targeted raising annual shale-gas output from practically nothing now to 6.5 billion cubic meters by 2015 and as much as 100 billion cubic meters by 2020.

Under Sinopec's latest shale-gas agreement, ConocoPhillips will drill two wells in a 3,917.53-square-kilometer section of the Qijiang block in China's southwestern Sichuan province, Sinopec said. It didn't disclose financial details.

Chevron plans to drill three more wells in shale formations in China, but doesn't expect rapid progress there, Chevron Gas and Midstream President Joseph Geagea said earlier this month, citing a shortage of geological data and insufficient infrastructure.

Although Shell has said the results of its joint study agreement have been encouraging, the Chinese government hasn't yet announced approval of its production-sharing contract with PetroChina.

China's progress in developing shale-gas reserves has been slow to date, even though its energy majors have bought into shale-gas assets in North America to gain know-how in the projects and technologies that have spurred a gas boom in the US. As MRC wrote earlier, Dow Chemical, Formosa Plastics, and Chevron Phillips Chemical have vast expansion plans in North America.


Rising PS prices in foreign markets put pressure on the Russian market

MOSCOW (MRC) - Russian market participants anticipate the increasing prices of polystyrene (PS) from local producers in early 2013 on rising prices in the foreign markets, said MRC analysts.

Over the last months of 2012, the price of polystyrene in Europe, Asia and America is rapidly increasing. Producers explain price increase by the rising cost of feedstock, in particular styrene monomer. Due to the low margins, the makers have to shift the burden of price increase to customers.

In Asia, the price of styrene monomer in early October was at USD1,500-1,570/tonne, while in December it was already at USD1,680-1,700/tonne, CFR China. In Europe, the price of styrene monomer in the second half of December reached USD1,680-1,725/tonne, FD NWE, although in early November it was within USD1,600-1,620/tonne.

The price can keep growing in 2013. Some makers of polystyrene and styrene plastics already announced their intention to increase the price if feedstock prices proceeds growing.

In this situation, the Russian buyers of polystyrene fear similar increase of quotations from Russian producers. However, the traditionally low level of activity in the first half of January can be a limiting factor in the Russian polystyrene market.

In the first half of January, the activity in the Russian market will be very low on Christmas and New Year. Converters and traders have formed the necessary stocks of high impact polystyrene (HIPS) and general purpose polystyrene (GPPS), to meet the needs of production for this period. Consequently, purchasing, to a greater extent will be renewed at the end of the month.

The beginning of the year is characterized by low activity in the market of expandable polystyrene (EPS). Many converters stop production for turnaround, which also reduces the volume of purchases.

However, the inelasticity of demand in this period, as well as high prices of Chinese EPS can help Russian producers to maintain price at the same level. In addition, some buyers of EPS suppose that Russian producers can increase their prices, if Chinese material keeps growing further.

More detailed information about prices in the foreign and local markets of PS is available in a Price Report ICIS-MRC.


Polystyrene output in Russia made 34,810 tonnes in November

MOSCOW (MRC) -- In November, 2012, polystyrene production in Russia made record 34,810 tonnes, according to MRC ScanPlast.

In November, the production of polystyrene (HIPS, GPPS, EPS and ABS) made 34,810 tonnes, which is a record index for the Russian market. The year-to-date index made 328,110 tonnes, up 12% year-on-year.

The production volumes of HIPS and GPPS made 289,310 tonnes, which is equal to 88% of the total output. Nizhnekamskneftekhim accounts for 175,600 tonnes of the produced polystyrene, while PGProf and Gazprom neftekhim Salavat produced 38,860 tonnes and 20,200 tonnes of PS, respectively.

Over the past eleven months, 81,090 tonnes of EPS was also produced, up 89% year-on-year. The growth was due to the production volumes of Perm plant, the project capacity of which is 100,000 tonnes annually. The year-to-date production of EPS of Alphapor grade at Perm (SIBUR-Khimprom) made 61,520 tonnes. Another representative of SIBUR group - Plastik Uzlovaya - produced 7,700 tonnes of EPS. Angarsk polymer plant manufactured 11,790 tonnes of the material.

Apart from EPS, Plastik (Uzlovaya) produces ABS. In January-November, 2012, an output of the material made 12,300 tonnes. In late 2012, a new ABS line was launched at Nizhnekamskneftekhim, the project capacity of which makes 60,000 tonnes annually.


Petchem makers plan production shutdowns in Middle East in January

(plastemart) -- Middle Eastern suppliers have been talking about their limited allocations for polypropylene (PP) and polyethylene (PE) in global markets.

After Saudi Polymers shut its new Jubail complex in November, as MRC wrote earlier, other producers have been added to the list of shutdowns recently reported from the region.

Saudi Polymers was expected to resume production on December 11 at its complex, where they faced technical problems earlier and had to go for a shutdown after it had started commercial operations in October. The complex hosts a cracker with a capacity to produce 1.16 mln tpa of ethylene and 430,000 tpa of propylene, plus a total PE capacity to produce 1.1 mln tpa and 400,000 tpa of PP. The restart date remains unclear as of now while some players speculate that it should be back into operations in January.

Borouge had a shutdown at its Ruwais petrochemical complex in Abu Dhabi in December, bringing down its two PE units with a total capacity of 600,000 tpa. Now, the producer is preparing to shut its Borouge 2 site in mid January for a month long maintenance. The site includes a 1.45 mln tpa cracker along with a 540,000 tpa PE unit and two PP units, each producing 400,000 tpa.

PetroRabigh is also considering a shutdown at its 600,000 tpa LLDPE plant in Saudi Arabia, according to market players. The maintenance shutdown is expected to take place in early January or mid January, they report, while they are currently said to be running at low rates. A market source also informed that the shutdown will last three to four weeks.