Petronas delays Johor refinery start-up to 2017

MOSCOW (MRC) -- Malaysian state oil and gas company Petronas has pushed back the completion date for its Johor refinery-petrochemical project to 2017 as a final investment decision has been delayed, said Reuters.

The company was expected to give the project the green light this year but had to push it back due to political uncertainty during the national elections early this year, industry sources said.

"It has been delayed by just three months," Petronas CEO Shamsul Azhar Abbas told Reuters, adding that a decision would be made in early 2014.

He said the project's completion would be pushed back to 2017 from the original forecast of end 2016. The CEO is expected to step down before the project is completed. When asked if he would be retiring in 2015, Shamsul said: "That's when my contract ends."

As MRC wrote before, Petronas or Petroliam Nasional Bhd. has announced that first-quarter net profit slipped 4.7% from a year earlier but 2013 earnings may still be steady on higher output. Net profit for the three months ended March 31 was 17.56 billion ringgit (USD5.7 billion) compared with MYR18.43 billion a year earlier, Petronas said in a statement. Revenue rose 1.9% in the period to MYR76.68 billion from MYR75.25 billion.

Petronas, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company wholly owned by the Government of Malaysia. The Group is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining; marketing and distribution of petroleum products; trading; gas processing and liquefaction; gas transmission pipeline network operations; marketing of liquefied natural gas; petrochemical manufacturing and marketing; shipping; automotive engineering; and property investment.
MRC

MOSCOW (MRC) -- Solvay has recently announced that the US Environmental Protection Agency (EPA) has issued a SNAP (Significant New Alternatives Policy) approval for the company’s third-generation foaming agent solution commercial blends, reported GV.

Thus, the company's Solkane 365/227 (93:07 and 87:13 blends of HFC-365mfc and HFC-227ea, containing 7 – 13 % HFC-227ea and the remainder HFC-365mfc) were approved by EPA.

Solvay says SNAP approval of its Solkane 365/227 blends makes this third-generation foaming agent solution an acceptable substitute for ozone-depleting substances in rigid polyurethane spray and extruded polystyrene applications.

Solkane 365/227 has been produced and successfully used for years in a broad range of PU and extruded polystyrene applications in Europe and Canada.

In the USA, both HFC-365mfc and HFC-227ea are exempt from VOC (volatile organic compound) classification, an important point for many US customers. Approvals for additional PU applications also remain pending at EPA, says the company.

The Solkane brand categories worldwide include refrigerants, foam blowing agents, solvents, fire extinguishing agents and further specialised niche markets. They are widely used in stationary and mobile AC refrigerant applications, insulating applications, and fire suppression as well as a range of cleaning applications.

According to Solvay, Solkane 365/227 has become the product of choice internationally in a number of PU applications, including spray foam, where non-flammable blowing agents are essential or where high quality is requested. In addition to the applications recently approved in the USA, typical applications elsewhere globally include PU and extruded polystyrene pipe insulation, PU sandwich panels (continuous/discontinuous; construction/reefer), PU and polystyrene insulation panels, as well as PU block and integral foams.

As MRC informed previously, two of Europe’s biggest chemical companies -Solvay and Ineos Group - have recently agreed to form a joint venture that will create one of the world’s largest producers of PVC plastics by revenues. The 50-50 joint venture will allow Solvay to exit the market for PVC, plastics used in the manufacture of construction products such as pipes and window frames, which has suffered during the downturn on the back of waning demand from the building industry.
MRC

MOSCOW (MRC) -- Japanese refiner Idemitsu Kosan Co. and its partners have made a final investment decision on Vietnam's second oil refinery and secured USD5 billion in project finance, reported Hydrocarbonprocessing with reference to Idemitsu's statement.

The USD9 billion Nghi Son complex 180 kilometers south of Hanoi will have a refining capacity of 200,000 bpd. It is slated to process Kuwaiti crude supplied exclusively by Kuwait Petroleum International.

Construction will begin in July and commercial operations are expected to start in the second quarter of 2017.

Idemitsu and Kuwait Petroleum each owns a 35.1% stake in the project. State-owned Vietnam Oil & Gas Group, known as Petrovietnam, and Mitsui Chemicals own 25.1% and 4.7%, respectively.

Petrovietnam will buy all oil products from Nghi Son at Asian market prices, as its output is primarily intended to meet the needs of Vietnam's domestic market. The joint-venture contract also allows it to export any excess production to avoid reducing the refinery's operating rate.

Nghi Son will produce 700,000 tpy of paraxylene, all of which Idemitsu and Mitsui Chemicals will take. Besides, it will produce polypropylene (PP) and aromatics.

The project has been delayed several times -- the final investment decision was originally scheduled for the summer of 2010 -- as the partners struggled to obtain bank financing without underwriting by the Vietnamese government. Talks progressed rapidly, however, after the government agreed in August to take official and unofficial measures to minimize financial risks.

As MRC wrote earlier, in May, 2013, the Vietnamese government approved to a 660,000 barrel oil refinery and petrochemical complex for an estimated USD27 billion by the energy giant PTT Plc, paving the way for a detailed feasibility study within a year.
MRC

MOSCOW (MRC) -- Nova Chemicals has begun construction on the expanded polyethylene facilities at the Joffre Site which will include a world-scale polyethylene reactor (R3), said the company in its site.

While R3 and associated infrastructure require a significant USD900-million capital investment, the project is categorized as modest derivative expansion, largely integrated within the site’s existing "footprint."

R3, once it is commissioned in the Fall of 2015, will be the third reactor in our existing PE1 facility. Currently, PE1 has two identical production "trains" referred to as polyethylene reactors. R3 has been designed to produce between 950 to 1,100 million pounds of linear low density polyethylene (LLDPE). This will be an approximate 40% increase in our overall site polyethylene capacity and will use existing Joffre Site ethylene capacity.

As MRC wrote earlier, growth in the LDPE market is part of NOVA 2020, the company's long-term asset strategy to capitalize on emerging feedstock opportunities and growing North American demand. Restoring the Moore facility is the first step in NOVA Chemicals’ plan to strengthen its commitment to the LDPE market to better meet the needs of customers.

NOVA Chemicals Corporation is a plastics and chemical company headquartered in Calgary, Alberta, Canada, and is a wholly owned subsidiary of the International Petroleum Investment Company (IPIC) of the Emirate of Abu Dhabi, United Arab Emirates.
MRC

MOSCOW (MRC) -- Fitch Ratings has upgraded NOVA Chemicals Corporation's (NOVA) Issuer Default Rating (IDR), unsecured bank credit facilities, and senior unsecured notes to 'BB+' from 'BB' and its secured credit facility to 'BBB-' from 'BB+', said Finance.

The rating outlook is stable. Approximately USD715 million of debt is affected by this rating action. A complete list of ratings is included at the end of this release.

The upgrade is based on NOVA's continued strong operating performance and its substantial debt paydown. NOVA benefits from robust demand and tight supply in its core Olefins/Polyolefins segment, which mainly produces ethylene and polyethylene. The resulting favorable supply environment coupled with low costs for light feedstock has resulted in high operating profits and margins. In the latest 12 months (LTM) period ended March 31, 2013, NOVA had operating EBITDA of approximately USD1.2 billion, corresponding to a margin of 23.5%, based on USD5 billion of revenues.

The company's performance resulted in significant LTM free cash flow (FCF) of USD525 million, based on USD966 million of cash flow from operations, USD360 million of capital expenditures and USD75 million of capital distributions. However, Fitch does not anticipate NOVA will continue generating FCF. In April, NOVA increased its distribution to USD150 million. The company also is ramping its cap ex spend to accomplish its NOVA 2020 strategy. Fitch expects NOVA to produce negative FCF in 2013, 2014 and 2015 as the company's spend for planned projects and cash distributions outpace cash from operations.

The strengthening of the company's credit profile partially mitigates the key ratings constraints, the price volatilities and the demand and supply cyclicality of commodity chemicals. Prices for the company's commodity products sold to third party customers (ethylene, polyethylene, polystyrene and by-products) are volatile as they follow the cyclicality of the industry, which is not only influenced by the economic demand cycle but also by the industry's supply dynamics.

As MRC wrote earlier, growth in the LDPE market is part of NOVA 2020, the company's long-term asset strategy to capitalize on emerging feedstock opportunities and growing North American demand. Restoring the Moore facility is the first step in NOVA Chemicals’ plan to strengthen its commitment to the LDPE market to better meet the needs of customers.

NOVA Chemicals Corporation is a plastics and chemical company headquartered in Calgary, Alberta, Canada, and is a wholly owned subsidiary of the International Petroleum Investment Company (IPIC) of the Emirate of Abu Dhabi, United Arab Emirates.

MRC