Solvay and Sadara JV begins construction of hydrogen peroxide plant

MOSCOW (MRC) -- In AntweSaudi Hydrogen Peroxide Company, a newly created joint venture between Sadara Chemical Company (Sadara) and the Solvay Group (Solvay), has embarked on construction of one of the world's largest hydrogen peroxide (HP) plants in Saudi Arabia, as per Plastemart.

With a capacity exceeding 3,00,000 tpa and a planned start up in 2015, the mega plant is being built at Sadara's chemical complex in Jubail Industrial City II. It will be the first HP facility in the Kingdom. Sadara will use output from the plant as a raw material for the HP-to-propylene oxide (HPPO) manufacturing plant on the site, thereby supporting its propylene oxide (PO) derivative units that produce polyols and propylene glycol.

The plant will provide a key raw material to Sadara and will strengthen Solvay's global leadership position in HP technology and markets. For Solvay, this will be its third joint venture mega HP plant following the 2,30,000 tpa plant in Belgium, a JV with The Dow Chemical Company (Dow) and BASF, and the 3,30,000 tpa mega plant in Map Ta Phut, Thailand, a JV with Dow.

"We are delighted to be partnering with Solvay, a global leader in HP, to build this world scale plant to feed our PO, PO derivatives and Polyurethane business. This partnership will provide us with a stable and reliable supply of a key raw material which is critical to support our Polyurethane-based customers and downstream value chains," said Ziad Al-Labban, CEO of Sadara.

We remind that, as MRC wrote previously, in earlly Junly 2013, Sadara Chemical Company announced financial close for the funding of main financing of approximately USD10.5 billion project. This marks the completion of project financing for Sadara, which is a joint venture between the Saudi Arabian Oil Company (Saudi Aramco) and the Dow Chemical Company. The main financing supplements the USD2 billion raised through a sukuk issuance in April, bringing the total Sadara project financing raised to approximately USD12.5 billion, the "largest project financing ever in the Middle East."

Sadara Chemical Company is a joint venture between Saudi Aramco and Dow Chemical. The Sadara complex, which will have 26 manufacturing facilities, is claimed to be the world"s largest petrochemical facility ever built in a single phase and will manufacture more than three million tonnes of chemical and plastics products.

Solvay S.A. is a Belgian chemical company founded in 1863, with its head office in Neder-Over-Heembeek, Brussels, Belgium. Solvay Chemicals is a world leading producer of essential chemicals including soda ash, caustic soda, hydrogen peroxide and special chemicals such as fluorinated products, ultra-fine fillers, high purity barium and strontium.
MRC

MOSCOW (MRC) -- Hanwha Chemical is likely to shut a dioctyl phthalate (DOP) plant for maintenance turnaround, as per Apic-online.

A Polymerupdate source in South Korea informed that the plant is planned to be taken off-stream in end-October 2013. It is expected to remain shut for around two weeks.

Located in Ulsan, South Korea, the plant has a production capacity of 80,000 mt/year.

As MRC wrote previously, Sipchem Chemicals Company (SCC), an affiliate of Saudi's Sipchem, signed on July 22, 2013 an incorporation agreement with Hanwha Chemicals Corporation to form a new company, under name of "Saudi Specialty Products Company" for establishing conversion projects in Saudi Arabia. The Joint Venture between SCC and Hanwha comprised of two manufacturing facilities; the first one located at Hail will produce 4,000 MTPA of EVA films whereas the second one located at Riyadh will manufacture plastic moulds up to 1000 tons. It is noteworthy that Sipchem Chemicals Company owns 75% of new company capital while Korean Hanwha owns 25%.

Hanwha Group is one of the largest business conglomerate in South Korea. Founded in 1952 as Korea Explosives Inc., the group has grown into a large multi-profile business conglomerate, with diversified holdings stretching from explosives, their original business, to retail to financial services.
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MOSCOW (MRC) -- Fitch Ratings has raised PKN Orlen's credit rating to BBB-, with a 'stable' outlook, which means that after four years the company has won back its investment-grade standing, according to the company's press release.

This long-awaited change is a result of a consistent deleveraging effort and a policy aimed to maintain all financial ratios at safe levels, which has significantly improved the company's credit standing, despite the persistently challenging climate for the industry across Europe.

Fitch Ratings has also upgraded the company's national rating to A- (pol), with a 'stable' outlook.

As grounds for its decision, the agency pointed to the measures taken by PKN Orlen to maintain a stable financial standing, such as reduction and maintenance of leverage at a safe level, a reasonable capex policy taking account of macroeconomic conditions, as well as the successful sale of its interest in Polkomtel S.A. According to the agency, these measures support the Company's creditworthiness, especially given the challenging climate for the company's two core business segments - refining and petrochemicals.

According to the agency, the key factor underpinning the company's creditworthiness is its strategy update adopted in November last year, which reflects the focus on maintaining financial ratios at moderate levels. The agency analysts have also acknowledged the financial flexibility underlying the company's strategy. Emphasis has been placed on PKN ORLEN's sustainable investment policy, in particular the standby capex, which may be utilised depending on the implementation of key investment plans and the prevailing macroeconomic conditions, particularly in power generation and upstream.

"For the past four years, we have worked hard to regain our investment-grade rating – despite the challenging and highly volatile macroeconomic environment, we have reduced the Company's debt burden by more than PLN 7bn, reduced and have kept the financial leverage ratio at a comfortable level below 30%, and diversified our financing sources. We are a credible partner, also in the eyes of retail investors, as best evidenced by the huge success of the PKN ORLEN retail bonds issued in June, which were assigned a high "BBB+(pol)" rating by Fitch," said Slawomir Jedrzejczyk, CFO and Vice-President of the PKN ORLEN Management Board.

As MRC wrote previously, in June 2013, PKN Orlen, one of the largest oil and gas companies in Europe, offered for sale a second PLN 200m tranche of its bonds and expects the proceeds from the entire bond issue programme to reach approximately PLN 1bn. This move was done in response to the enormous interest in PKN Orlen bonds on the part of investors, who subscribed to the entire PLN 200m of the first series of bonds in just two days.

Polski Koncern Naftowy ORLEN S.A. (PKN Orlen) is a Polish oil and gas company. It has a lot of petrol stations in Poland, Germany, Czech Republic, Lithuania and Slovakia. It is the biggest company in Poland and one of the biggest oil and gas companies in Europe. Polish group PKN Orlen PKNA is a majority owner - 63% of czech polyolefins manufacturer Unipetrol.
MRC

MOSCOW (MRC) -- State-run Oil and Natural Gas Corp. (ONGC), the promoter of the ONGC Petro-Additions Ltd. (OPAL) project in Dahej, Gujarat, India, has retained Ernst & Young to find a strategic partner for at least a 25% interest in OPAL, reported Apic-online.

The USD3.24-billion project includes units to produce 1.1-million t/y of ethylene, 340,000 t/y of propylene, 720,000 t/y of linear low- and high-density polyethylene (LLDPE and HDPE), 340,000 t/y of polypropylene (PP), 95,000 t/y of butadi-ene and 135,000 t/y of benzene. Production is expected to begin in 2015.

ONGC holds a 26% interest in OPAL, GAIL India holds 15.5% and Gujarat State Petroleum Corp. holds 5%. Once ONGC finds a strategic investor for a 25% interest, the company expects to launch a public offering.

Among the parties that have expressed interest are Saudi Aramco, Basell, Qatar Investment Authority and Kuwait Investment Authority.

As MRC informed previously, ONGC has recently signed a memorandum of understanding with fellow Indian company Reliance Industries which could see the pair share the latter's infrastructure on the country's east coast. ONGC said the agreement would help minimise its capital expenditure as well as speed up the development of its deep-water fields which lie near Reliance's.
MRC

MOSCOW (MRC) -- Total SA (FP) Chief Executive Officer Christophe de Margerie raised the possibility that the country’s biggest oil company is planning an overhaul amid speculation over the future of its petrochemicals operations, according to Bloomberg.

An employee meeting has been called for Sept. 4 to discuss Total’s petrochemicals strategy as well as a future project for its Carling plant in northern France, de Margerie said. He told a panel discussion the company may restructure its French operations.

He declined to comment further on Carling, citing French law under which changes that may affect jobs must first be given to workers at meetings like the one planned for next week.

"Total could announce a plan to halt the steam cracker" at Carling, Eric Sellini, the CGT union coordinator at the French oil company, said by telephone. "I don’t think the whole site will be shut but we just don’t know."

Total, which gets most of its earnings from oil and natural gas production, has struggled to boost profits at its refining and petrochemicals divisions in recent years. The explorer unveiled an overhaul in 2011 to merge crude processing and petrochemicals and separate out fuel marketing.

"Total, like others, will have to carry out" a restructuring in France, de Margerie said during a panel discussion at a meeting of the employers’ group known as Medef.

Europe’s third-largest oil company has already reduced European refining through the closing of its plant near Dunkirk in France, capacity reduction at Normandy and the sale of its 49 percent stake in Spain’s Cia. Espanola de Petroleos SA. Total has also tried and failed to sell its Lindsey plant in the U.K.

The Carling plant, which makes petrochemicals such as ethylene and propylene at the site near the German border, employs 350 Total workers as well as sub-contractors, Sellini said. These chemicals are used to make plastics.

Total has four steam crackers in France, including units at the Gonfreville, Feyzin and Lavera refineries. The company cut jobs at Carling in a plan announced in 2009.

As MRC reported earlier, Total has signed a final agreement to sell TIGF, a regional gas pipeline network, to a group comprising Italy's Snam, Singaporean sovereign fund GIC, and French state-controlled power utility Electricite de France. TIGF was put up for sale last autumn as part of a wider strategy to sell EUR20 billion of assets by 2015 to help boost its cash flow and finance substantial investments.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
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