IPC signs a loan agreement to support greenfield EVA/LDPE plant

MOSCOW (MRC) -- International Polymers Company (IPC), Sipchem's affiliate, has signed on 10 June 2013 a financing agreement of SR 704 million (USD 188 million) with Public Investment Fund (PIF), reported the company on its site.

The loan is repayable over 14 years in 26 semiannual and equal installments commencing December 2014. The loan is payable until 30 June 2027 and secured until project completion by order notes.

The purpose of this agreement is to support the project financing of a greenfield EVA/LDPE plant.

The plant will produce ethylene vinyl acetate (EVA) and low density polyethylene (LDPE) with an annual production capacity of 200,000 tonnes in its industrial complex in Jubail Industrial City. Plant start-up is scheduled in the third quarter of 2013.

We remind that, as MRC wrote previously, in December 2012, Sipchem launched the construction of its EVA films project in Hail Industrial City. The SR 120 million plant will manufacture 4,000 tpa of EVA films. The project will be financed by the company and other local backers and is expected to be operational by Q3-2013.

EVA is used as a feedstock in the production of heat soluble adhesives, resin products and high-quality sports bandages; while LDPE is used as a feedstock in the production of various types of containers, bottles and medical detergents.

IPC is jointly owned by Sipchem 75% and Hanwha Chemical Corporation 25%.

Established in 1999, Saudi International Petrochemical Company (Sipchem) manufactures and markets methanol, butanediol, tetrahydrofuran, acetic acid, acetic anhydride, vinyl acetate monomer. Besides, it has launched several down-stream projects to manufacture ethylene vinyl acetate, low density polyethylene, ethyl acetate, butyl acetate, cross linkable polyethylene, and semi conductive compound that are scheduled to start in 2013.
MRC

MOSCOW (MRC) -- An explosion and fire killed at least one person and injured 73 at the Williams Olefins chemical plant in Geismar, Louisiana, on Thursday, leading authorities to order people within two miles (3 km) to remain indoors, reported Chicago Tribune.

The blast at 8:37 a.m. (1337 GMT) sent a huge fireball and column of smoke into the air at the plant along the Mississippi River just south of Baton Rouge and about 60 miles (100 km) up river from New Orleans.

The fire, fueled by the petrochemical propylene, was still burning more than five hours later, though government monitors had yet to detect dangerous levels of emissions, Louisiana Governor Bobby Jindal told a news conference near the scene.

"There are no early detections of dangerous levels of VOC - that's volatile organic compound - but out of an abundance of caution both the company and the DEQ (Department of Environmental Quality) are doing testing not only at the plant site but miles away from the plant site following the direction of the plume," Jindal said.

Some 300 workers from the plant were evacuated and all the employees were accounted for, among them 10 who stayed behind in a safe room inside the plant, Jindal said .

"Emergency shut-down valves have been closed. The unit is isolated," parent group Williams Cos. said in a statement.

The company's own emergency response crews were assisting at the scene, Williams said.

Authorities ordered people within a 2-mile (3-km) radius to remain in their homes, in part because of the toxic smoke, said Lester Kenyon, a spokesman for Ascension Parish.

That "shelter in place" order was later lifted for residents but remained in effect for four other plants in the area that scaled down their operations, Jindal said.

The plant produces approximately 1.3 billion pounds of ethylene and 90 million pounds of polymer grade propylene, according to the Williams website. These are used in the petrochemical process to make plastics.
MRC

MOSCOW (MRC) -- Formosa Petrochemical Corp, Taiwan's largest private refiner, expects to produce more intermediate petrochemicals used in making rubber and other insulative materials on an expected gradual recovery in global demand and will seek new markets overseas amid rising domestic supply, reported Plastemart with reference to Dow Jones Business News.

Formosa Petrochemical expects to produce 2.8 mln tonnes of ethylene this year, up 8.7% from 2.6 mln tonnes in 2012, although global ethylene prices are unlikely to rise this year due to increasing supply from China and the Middle East.

The refiner also plans to produce 2.2 mln tonnes of propylene this year, up 7.6% from 2.0 mln tonnes last year, it said. The company said it may look for new overseas markets for propylene, as CPC Corp., a government-run refiner in Taiwan, is expanding propylene production domestically.

Chairman Chen Bao-lang said at the meeting that global petrochemical demand will likely recover gradually on the back of the U.S., Japan and China, whose economies are set to grow, albeit moderately, on policy driven stimulus measures.

Mr. Chen also said Formosa's 50-50 joint venture with Kraton Performance Polymers Inc. ( KRA ) is set to start operation in 2015. The facility, to be built in Mailiao in central Taiwan, will have an annual output of 30,000 tonnes of hydrogenated styrenic block coplymer, an intermediate petrochemical used in making adhesives and rubber coatings.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company's plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC

MOSCOW (MRC) -- Czech downstream oil group Unipetrol (PKN Orlen's affiliate) expects petrochemicals to become the largest source of revenue for the company in 2013-2017, according to PKN Orlen's press release.

Unipetrol wants to use the favourable market conditions to reinforce its position on the petrochemical market and optimise its operations.

Thus, the company is preparing a number of modernisation projects: construction of new polyethylene and DCPD units, de-bottlenecking of polypropylene production. It also intends to continue the restructuring process (revamping of the residual oxidation unit (POX), possible closure of the ammonia unit).

By 2017, the Company plans to increase the capacity utilisation of the pyrolysis plant by 13%, and improve sales of petrochemical products by 11%, to 1.4m tonnes.

Based on estimates, average annual LIFO-based EBITDA should reach CZK 3.3bn (up by CZK 1.4bn compared with 2012). Capital expenditure (including expenditure on investments in the power segment) will amount to CZK 2.7bn in 2013-2017 on an average annual basis. Average annual operating cash flow (FCF) will improve from CZK 1.1bn in 2009-2012 to CZK 1.5bn in 2013-2017.

Unipetrol , a.s. is a group of companies operating in the petrochemical industry in the Czech Republic. In 2005 Unipetrol became a part of the PKN ORLEN Group, the largest oil processor in Central Europe. The UNIPETROL Group is oriented mostly towards oil processing, fuel distribution and petrochemical production. In all of these business areas the Unipetrol Group is among the key players both in the Czech Republic and on the Central European market. The Group ranks among the leading firms in the Czech Republic in terms of its revenues, and employs almost 4,000 people.
MRC

MOSCOW (MRC) -- Chevron Phillips Chemical Co., the petrochemical venture of U.S. oil producer Chevron Corp. (CVX) and refiner Phillips 66 (PSX), is exploring ways to expand in the Middle East, including building a new plant, said Bloomberg.

The U.S. partnership would consider setting up a site on its own or in a joint venture, and the "entire" region is under consideration, Benny Mermans, head of Europe and Africa at Chevron Phillips Chemical’s international operations, said in an interview at a petrochemical conference in Frankfurt.

The chemical company’s owners are "very supportive" of growth plans, Mermans said. Woodlands, Texas-based Chevron Phillips, also known as CPChem, is already spending about USD5 billion on a new ethylene plant, or cracker, and two factories making polyethylene in Baytown, Texas, to take advantage of cheap natural gas, which is used as a raw material as well as an energy source.

"Look at our ownership structure," Mermans said. "We represent a fair share of their net income. By having that support, by creating margins, that provides us with a lot of legroom” for gaining resources for growth.
Chevron Phillips has three joint ventures in the Saudi Arabian industrial city of Jubail as well as partnerships in Qatar in Messaieed and Ras Laffan, Melanie Samuelson, a spokeswoman at the U.S. company, said in an e-mail.

Expansion would be financed by the chemical business itself, and Chevron Phillips would tap capital markets for further cash should the need arise, Mermans said.

Availability of cheaper shale gas in the U.S., extracted by the hydraulic fracturing process known as fracking, means that Europe is being "squeezed on all sides," Mermans said. The company will focus on more specialty chemicals in the region and is expanding a plant in Tessenderlo, Belgium, to add sulfur-based organic products.

In the U.S., Chevron Phillips is the first company in more than a decade to build an ethylene plant, Mermans said. The cracker, which will produce 1.5 million metric tons of the gaseous chemical a year, is on schedule to start operations in 2017, with the company’s board expected to give final approval in the third quarter, he said.

Dow Chemical Co. (DOW), the largest U.S. chemical maker by sales, and Exxon Mobil Corp. (XOM), the biggest U.S. oil company, have said they plan similar-sized ethylene plants in Texas.
"It’s a race," Mermans said. "CPChem is well placed to be first."

MRC