Petkim and Socar plan to transform Aliaga into an industrial cluster

MOSCOW (MRC) -- Petkim together with its key owner, Socar plans to transform Aliaga into an industrial cluster. The transformation has several positive effects on Petkim, said Seenews.

Star refinery, Petlim and Petkojen projects are the key earnings drivers. Among these initiatives, the building of Star refinery by Socar-Turcas, the container port project Petlim and co-generation plant project Petkojen are the key additions. Star refinery allows Petkim to receive feedstock at lower cost and better quality. Petlim utilizes the port area belonging to the company more efficiently. Petkojen lowers the overall energy cost of the company by turning the boilers to dual mode.

As MRC wrote earlier, Petkim will start building a USD400 million port in November and complete it within two years, Yavuz said. Together with a USD5 billion refinery that the company is building, the port will help cut raw material costs by USD75 million a year.

Socar's Turkey unit will start imports of 1.2 billion cubic meters a year of natural gas from Azerbaijan in 2013, Yavuz said. The company will sell as much as 500 million cubic meters of that gas to Petkim, and the rest to other Turkish buyers.

Petkim is the leading petrochemical company of Turkey. Specializing in petrochemical manufacturing, the company produces ethylene, polyethylene, polyvinyl chloride, polypropylene and other chemical building blocks for use in the manufacture of plastics, textiles, and other consumer and industrial products.


MRC

MOSCOW (MRC) -- A. Schulman Inc. rejected Ferro Corp.'s claims that its proposed USD563 million cash-and-stock acquisition was a "low-ball" offer and said it is open to revising its initial bid, according to The Wall Street Journal.

Last month, the specialty-chemicals company made public its USD6.50-a-share offer for Ferro, after its smaller peer rejected the overtures. A group of Ferro shareholders seeking board representation have said Ferro's "abrupt" rejection of the buyout offer suggests the board may be seeking to entrench itself.

A. Schulman said Monday it continues to be disappointed by the Ferro board's refusal to talk.

"We reiterate our call for Ferro's board to enter into serious discussions with A. Schulman regarding our offer, and we are hopeful that the Ferro board will engage us following Ferro's annual meeting and election of directors on May 15, if not sooner," said Chairman and Chief Executive Joseph M. Gingo.

Ferro said its board carefully considered A. Schulman's proposal and unanimously determined it was inadequate and not in the best interests of shareholders. The company said it believes the continued execution of its strategy will deliver greater shareholder value.

Ferro shares slipped six cents to USD6.76 in regular session trading, while A. Schulman's shares fell 12 cents to USD25.49.

We remind that, as MRC wrote previously, in mid-2012 A. Schulman Inc. inked a definitive agreement to acquire ECM Plastics, a privately owned plastics compounder located in Worcester, Mass., for USD36.5 million. Besides, Jeddah-based National Petrochemical Industrial Company (Natpet), a subsidiary of Alujain Corporation, entered into a joint venture agreement with A. Schulman to produce polypropylene compounds.

A. Schulman is a global plastics supplier, headquartered in Akron, Ohio, and a leading international supplier of high-performance plastic compounds and resins, which are used as raw materials in a variety of markets. A. Schulman has 33 manufacturing facilities globally.
MRC

MOSCOW (MRC) -- OAO Lukoil Holdings, Russia's No. 2 oil producer, will invest USD1 billion in the oil firm Samara-Nafta to increase production, reported The Wall Street Journal with reference to Russian news agencies.

Lukoil acquired Samara-Nafta from Hess Corp. this month for USD2 billion as part of a strategy to stabilize and increase oil production. Lukoil has for years fought declining output at its main, Soviet-era fields in Western Siberia.

The investment in Samara-Nafta will increase production by between 5% and 7% over the next five years from 2.5 million tonnes a year, Prime news agency cited the company as saying.

As MRC informed previously, Lukoil's revenue for the full year 2012 increased 4.1% to USD139.2 billion from USD133.7 billion, on the back of higher oil prices. Earnings before interest, taxation, depreciation and amortization, or EBIDTA, rose 1.7% to USD18.9 billion from USD18.6 billion. Net profit for the year was up 6.2% on 2011 at USD11.0 billion.

We remind that in early March 2013, Lukoil started construction of combined cycle gas turbine unit (CCGT) at the regional industrial park, located in the immediate vicinity of Stavrolen, which had earlier resumed production of polyethylene (PE) and polypropylene (PP) after a short outage for maintenance.

OAO Lukoil Holdings is one of the leading vertically integrated oil companies in Russia. The main activities of the company include exploration and development of oil and gas, manufacturing and marketing of petroleum products.
MRC

MOSCOW (MRC) -- China's Jiangsu Sailboat Petrochemical Co. has licensed the advanced methanol-to-olefin (MTO) process of Honeywell's UOP to convert methanol from gasified coal into olefins, according to Hydrocarbonprocessing.

It is the fourth licensing win for UOP's advanced MTO process technology. The technology allows petrochemical producers in China and elsewhere to tap cheaper coal and natural gas feedstocks, rather than liquefied petroleum gas or oil, to produce ethylene and propylene to meet growing demand for petrochemicals.

All four MTO licenses have been in China, which possesses large coal reserves but imports the bulk of its petroleum.

"Jiangsu Sailboat will be able to help meet China's growing demand for ethylene and propylene by using methanol derived from cheaper and more abundant coal, maximizing yields of high-value petrochemicals and reducing operating costs," said Pete Piotrowski, senior vice president and general manager of UOP's process technology and equipment business unit.

"UOP continues to see high interest in this breakthrough technology and expects the first licensed unit in China to enter production this year," he added.

Once built, the Jiangsu Sailboat unit is expected to be the largest single-train MTO unit in the world, producing 833,000 tpy of ethylene and propylene. The unit will also provide feedstock to downstream units producing 4 million tpy of petrochemical products. Located in Lianyungang City, Jiangsu Province, China, the unit is expected to start up in 2015.

Since 2011, UOP has announced three other MTO projects. The first project will be with Wison (Nanjing) Clean Energy. The facility is expected to start up this year, and it is projected to produce 295,000 tpy of ethylene and propylene. Shandong Yangmei Hengtong Chemicals will also produce 295,000 tpy of ethylene and propylene and it is expected to start up in 2014. Jiutai Energy (Zhungeer) Co. licensed Honeywell's UOP/Hydro MTO process, and it is expected to produce 600,000 tpy of ethylene and propylene in its facility, which is expected to start up in 2014.

The advanced MTO process, jointly developed by Honeywell's UOP and INEOS, combines Honeywell's UOP/Hydro MTO process and the Total/UOP Olefin Cracking process, which significantly increases yields and efficiency when combined with MTO. The process converts methanol from non-crude oil sources such as coal or natural gas into ethylene and propylene.
MRC

MOSCOW (MRC) -- Saudi Basic Industries Corp (SABIC), the world's biggest petrochemicals group, is reviewing its global growth outlook, especially in light of the weak economic situation in Europe, as per chief executive Mohamed al-Mady, said Reuters.

He was speaking at a news conference after SABIC said on Thursday that it planned to cut 1,050 jobs in Europe and close some operations there because lower consumer spending had hit demand.

"SABIC does not do this because it wants to lay off people or shut down any plants. It does this because the situation demands it," Mady said.

However, he described Europe as a "special case" and said the continent would remain a very important market for the company, even in bad times.

Mady said he could not predict global petrochemical prices for this year but thought 2013 would be similar to 2012, with improvement in prices occurring after 2013.

Earlier on Saturday, SABIC said it posted a 10% year-on-year fall in its first-quarter net profit.

MRC