Solvay sees earnings drop with no sign yet of Europe recovery

MOSCOW (MRC) -- Solvay SA (SOLB), the chemical company created 150 years ago to produce soda ash, signaled that a lack of recovery in Europe will hurt earnings this year amid reduced demand for soda ash and plastics and lower sales of carbon credits, said Bloomberg.

Earnings before interest, tax, depreciation, amortization and one-time items will surpass last year’s EUR1.88 billion (USD2.44 billion) which excludes a EUR190 million windfall from inflated guar prices and larger quantities of emission credits, the Brussels-based company said today in a statement. That compares with analyst projections of EUR2.01 billion, the average of 22 estimates compiled by Bloomberg.

Solvay said it’s not seeing any significant improvement in European demand for the glass-making ingredient soda ash, for polyamide fibers or rare earths used in light bulbs after first-quarter Ebitda fell 12% to EUR454 million. Chief Executive Officer Jean-Pierre Clamadieu is making Solvay less cyclical and less reliant on Europe with an agreement to sell the company’s European vinyls and chlor chemicals businesses to Ineos Group Holdings within four to six years after the establishment of a joint venture planned later this year.

"Solvay is likely to have suffered from its exposure to European automotive and construction," Filip De Pauw, an analyst at ING Groep NV in Brussels, wrote in an investor note last week as he cut his projection for 2013 Ebitda by about 8% to EUR1.94 billion.

Net debt rose to EUR1.31 billion as of March 31, a 188 million-euro increase from the end of last year as inventories swelled because Solvay’s plants produced more vinyls in anticipation of scheduled maintenance at large sites later this year.

MRC

MOSCOW (MRC) -- BP has reported emitting sulfur dioxide from its Cherry Point refinery in Blaine, Washington, after a heater tripped, as per Hydrocarbonprocessing.

According to a filing with the Northwest Clean Air Agency, the line heater at the 225 Mbpd refinery's sulfur plant's went down, leading to an "ongoing release."

"They have an overall reduced rate of emissions among a number of units," the filing states.

A BP spokesman was not immediately available for comment.

We remind that, as MRC informed previously, in late March, 2013, Total PetroChemicals and Refining USA reported emissions at its Port Arthur, Texas, refinery owing to leaking exchangers at an alkylation unit's cooling tower. The refinery's crude oil throughput capacity is 174,000 barrels a day.

Earlier, in January, Total Petrochemicals and Refining USA reported a malfunction in the sulfur recovery unit of its Port Arthur, Texas refinery. The malfunction resulted in increased emissions at the 225,500-barrel-a-day refinery.

Total, one of the world's leading petrochemicals companies with business in Europe, the United States, the Middle East and Asia. Total has two main product groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.

BP is one of the world's leading international oil and gas companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items.
MRC

MOSCOW (MRC) -- The Dow Chemical Company, the largest US chemical maker by sales, has announced that it completed final resolution of the K-Dow arbitration with Petrochemical Industries Company of Kuwait (PIC), according to the company's press-release.

Dow confirms that it has received a direct cash payment of USD2.2 billion from PIC. Payment reflects the full damages awarded by the International Chamber of Commerce, as well as recovery of Dow’s costs.

In March, 2013, the International Court of Arbitration of the International Chamber of Commerce released the final award amount, representing interest and costs, in the arbitration case between Dow Chemical and Petrochemical Industries Company of Kuwait (PIC) related to the K-Dow transaction.

"Dow and Kuwait share a long history, and payment of this award brings final and appropriate resolution and closure to the issue," said Andrew N. Liveris, Dow’s chairman and chief executive officer. "Our partnership with Kuwait includes several industry-leading joint ventures, which are valuable assets in Dow’s portfolio and have consistently returned accretive equity earnings to Dow. We continue to look for ways to strengthen our relationships within the country for the benefit of our partners and Dow shareholders."

"Receipt of this award enables Dow to accelerate actions that are in line with our stated priorities for uses of cash – foremost of which is paying down debt and remunerating shareholders," Liveris added. "Our actions moving forward will be consistent with this approach."

As MRC reported earlier, Dow put together a USD17.4 billion joint venture with Petrochemical Industries Co. (PIC), a subsidiary of state-owned Kuwait Petroleum Corp., to produce plastics for consumer products, automotive parts, and drug processing in 2008. But as commodity prices plunged and the global economy went into a recession, the so-called K-Dow Petrochemicals joint venture was scrapped just days before it was set to close. Two months after the deal collapsed, Dow posted losses of USD1.55 billion for the fourth-quarter of 2008 and cut about 11 per cent of its global work force. The International Court of Arbitration in Paris ruled that PIC will pay Dow for backing out of the deal. The court is part of the International Chamber of Commerce.

The Dow Chemical Company is an American multinational chemical corporation headquartered in Midland, Michigan, United States. Dow is a large producer of plastics, including polystyrene (PS), polyurethane, polyethylene (PE), polypropylene (PP), and synthetic rubber.
MRC

MOSCOW (MRC) -- Qatar Petroleum and ExxonMobil have signed a commercial framework agreement for the proposed liquefaction project at the world-class Golden Pass LNG terminal facility in Sabine Pass, Texas, according to Hydrocarbonprocessing.

The deal establishes a commercial framework to sell up to the full 15.6 million tpy output of the Golden Pass liquefaction project, and provide shipping and sales opportunities to existing and new markets, including leveraging the sponsors’ long-term arrangements for international imports via the UK's South Hook facility.

"This agreement sets out a highly competitive commercial blueprint for Golden Pass Products, with a commitment that builds on the unique combined strengths of QP and ExxonMobil throughout the global downstream LNG value chain," said Bill Collins, president of Golden Pass Products.

Golden Pass Products would invest approximately USD10 billion to build the liquefaction facility in Sabine Pass, Texas.

Golden Pass Products has received US Department of Energy (DOE) authorization for exports to free-trade agreement (FTA) countries, and is awaiting DOE approval to export to non-FTA countries.

In addition, Golden Pass Products is advancing preparations for the Federal Energy Regulatory Commission (FERC) permitting process and said it anticipates pre-filing soon.

We remind that, as MRC wrote previously, recently ExxonMobil Corp. and BHP Billiton Ltd. have laid out plans to develop a huge natural gas field off the coast of Australia that would use the world's largest vessel capable of processing the gas at sea. The proposed facility would be capable of producing between 6 million and 7 million tonnes of liquefied natural gas a year. Production would begin in 2020-21.

Golden Pass shareholders and their joint ventures are world leaders in the LNG business with operational LNG expertise, financial capabilities, access to shipping fleets, large-scale regasification facilities and a diverse global customer portfolio, according to project officials.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3 percent of the world's oil and about 2 percent of the world's energy.
MRC