Solvay, Ineos said to plan site sale for USD5.7 bn merger

MOSCOW (MRC) -- Solvay and Ineos Group Holdings, which plan to merge their European vinyl chloride assets in a EUR4.3 billion (USD5.7 billion) deal, may sell a German site to help win regulatory approval, according to people familiar with the matter, said Bloomberg.

Ineos’s site in Schkopau, with the capacity to make about 150,000 tons of PVC a year, may fetch about 60 million euros, said two of the people, who asked not to be identified because the plan is not public. The two companies are putting together a proposal that may be delivered to European Commission regulators this month in order to divest the plant this year, they said.

The merger of their vinyl chloride assets, announced in May, may allow the companies to cut costs in areas from transport to marketing and raise profitability at a commodity business suffering from inflated raw material and energy costs. The PVC industry is facing overcapacity and weak demand in Europe, contrasting with shortfalls in markets like India.

"We are making good progress in the planned creation of our chlorovinyls joint venture," Lamia Narcisse, a Solvay spokeswoman, said in an e-mail. "It is possible that the European Commission will require us and Ineos to divest some plants in order for them to grant clearance."

The two companies are looking at what remedies the commission may demand and the viability of each option, Narcisse said in an e-mail. Ineos declined to comment.

Solvay S.A. is a Belgian chemical company founded in 1863, with its head office in Neder-Over-Heembeek, Brussels, Belgium. The company has diversified into two major sectors of activity: chemicals and plastics. Solvay supplies over 1500 products across 35 brands of high-performance polymers – fluoropolymers, fluoroelastomers, fluorinated fluids, semi-aromatic polyamides, sulfone polymers, aromatic ultra polymers, high-barrier polymers and cross-linked high-performance compounds.

INEOS Group Limited is a privately owned multinational chemicals company consisting of 15 standalone business units, headquartered in Rolle, Switzerland and with its registered office in Lyndhurst, United Kingdom. It is the fourth largest chemicals company in the world measured by revenues (after BASF, Dow Chemical and LyondellBasell) and the largest privately owned company in the United Kingdom.
MRC

MOSCOW (MRC) -- Karpatneftekhim (LUKOIL group) resumed polyethylene production, LUKOIL informed.

The plant was under shutdown from Sep. 2012 due to the unfavourable situation on the petrochemical market. In Apr. 2012 the memorandum of cooperation was signed by LUKOIL and Ukraine government. The wide-scale modernization of the equipment was completed in 2011 which permits now to produce 250ths ton of ethylene and 100ths ton of polyethylene per year.

The memorandum had been prescribed a number of conditions for the resumption of the Karpatneftehim's operation.
The main ones are: VAT refund in full, non-excise import of petroleum products for the production of ethylene and introduction of duties on imported unmixed PVC of 6.5%.

Ukranian government partially fulfilled Karpatneftekhim's requirements. The laws considering non-excise import of petroleum products and introduction of duties on imported unmixed PVC are expected to be adopted on 1 January 2014.

By now there was restarted only 100,000 tonnes/year unit for production of high-density polyethylene (HDPE) by using of imported ethylene from Hungary.

The data of other productions restart (ethylene, caustic soda, polyvinyl chloride) LUKOIL did not disclosed yet.

Only a third of Karpatneftekhim's HDPE was supplied to the domestic market. The remaining volumes are delivered for the export to Russia, Belarus and Turkey.

Given a stable operation the plant will be able to Ukraine's HDPE imports by one third; the capacity of HDPE market in Ukraine is 140,000 tonne.

According to the MRC Karpatneftekhim produced about 102,700 tonnes of HDPE and 83,800 tonne of suspension PVC in 2011. Karpatneftekhim produced about 73,500 tonnes of HDPE and 121,600 tonnes of PVC in the nine months of 2012.

MRC

MOSCOW (MRC) -- "Angarsk polymer plant" (part of Rosneft, Angarsk) resumed polyethylene (PE) production after a long outage for maintenance, according to MRC Price report.

On Tuesday, 10 September, "Angarsk polymer plant" resumed production of low density polyethylene (LDPE) after a 50-day shutdow for a scheduled turnaround.

The plant's annual PE production capacity is 77,000 tonnes. The overall LDPE output totalled 25,200 tonnes in seven months of 2013.

Angarsk Polymer Plant was established in 1974 as part of PO "Angarsknefteorgsintez" (now OAO "ANhK") in Angarsk. Prior to September 23, 1997, the company was called as "Polymer Plant OAO ANhK", and from 1 October of 1997, the polymer plant was withdrawn from the structure of "ANhK" and transformed into an independent subsidiary OAO "Angarsk polymer plant." Since 10 May, 2007, "Angarsk polymer plant" has been part of the "NK" Rosneft ".
MRC

MOSCOW (MRC) -- SIBUR announces the arrival of its first new gas carrier, Sibur Voronezh, at Ust-Luga seaport. The vessel will ship cooled liquefied petroleum gas (LPG) from the company's Baltic Sea terminal on a regular and year-round basis, according to the company's press release.

SIBUR will operate the carrier under a long-term charter agreement with Sovcomflot Group. The carrier was built by Korea-based Hyundai Mipo Dockyard Co. Ltd. The ship has already covered 12,000 nautical miles in 40 days on its journey from the Korean shipyard, where it set-off for Ust-Luga in late July.

The gas carrier is moored for test loading at SIBUR's new terminal as part of its start-up and commissioning programme. Once loading in Ust-Luga seaport has been completed, the carrier will head for Sweden on an LPG delivery.

A naming ceremony for Sibur Voronezh and SIBUR’s other new LPG carrier, Sibur Tobol, took place at Hyundai Mipo Dockyard’s shipyard on 4 July 2013. The gas carriers were named after the Russian Voronezh and Tobol rivers which flow through regions where SIBUR has its operations. Sibur Tobol, is expected to arrive at Ust-Luga in November 2013.

Both gas carriers were designed to SIBUR's specific requirements using the latest shipbuilding technology and in partnership with experts from Sovcomflot Group.

As MRC reported earlier, in the first quarter of 2013, SIBUR's gas processing plants (GPPs) processed 4.9 billion cubic metres of associated petroleum gas (APG), an increase of 5.3% year-on-year. As a result, production of natural gas rose 4.2% year-on-year to 4.2 billion cubic meters. Raw natural gas liquids (NGL) production increased by 12% year-on-year to 1.3 million tonnes. In the first quarter of 2013, the company's natural gas sales volumes increased by 26.7% year-on-year to 3.5 billion cubic meters. External sales of natural gas liquids, which comprise liquefied petroleum gases (LPG), naphtha and raw NGL, rose 11.7% year-on-year to 1.1 million tonnes.

SIBUR is a uniquely positioned vertically integrated gas processing and petrochemicals company. The company owns and operates Russiaэs largest gas processing business in terms of associated petroleum gas processing volumes and are a leader in the Russian petrochemicals industry. As of 31 March 2013, SIBUR operated 27 production sites across Russia and employed over 30,000 personnel. SIBUR serve over 1,500 large customers operating in the energy, automotive, construction, fast moving consumer goods (FMCG), chemical and other industries in approximately 60 countries.
MRC

MOSCOW (MRC) -- Arkema, a France-based chemical manufacturer, has announced that it is moving forward with the construction of a 1234yf LGWP refrigerant gas production plant with an anticipated start-up in 2016, according to the company's press release.

Forane 1234yf refrigerant gas will serve the future needs and satisfy regulations in the global automotive mobile air conditioning industry.

As background, the EU Mobile Air Conditioning Directive bans the use of refrigerants with a Global Warming Potential greater than 150 in new type-approved vehicles manufactured as of January 2013 and in all new vehicles sold in Europe as of January, 2017. Over the past several months, studies conducted by the SAE (Society of Automotive Engineers) have re-confirmed the safe use of 1234yf, effectively reinforcing the EC’s Directive calling for the phase out of the current refrigerant, R134a.

As a leading supplier of refrigerants to the automotive market, Arkema’s position has been that car manufacturers have not been given a sufficiently clear view on the availability and supply conditions for 1234yf, and this has limited progress to convert to the next generation refrigerant. With this investment, the company’s goal is to restore confidence across the automotive sector in 1234yf and Arkema takes this opportunity to assure the automotive industry that 1234yf will be available in commercial quantities to meet the phase down of R134a.

Arkema is executing a two phase strategy based on proprietary technology: this first phase, based in Asia, is a project capable of supplying the emerging needs for 1234yf and a second phase investment in Europe with the objective to fully replace R134a after 2017.

As MRC informed previously, Arkema has selected SpecialChem's Commercial Acceleration Solutions to support the global growth of its water-based fluoropolymer Kynar Aquatec latex in the exterior building and construction markets.

Arkema is a leading European supplier of chlorochemicals and PVC. Kynar and Kynar Flex are registered trademarks of Arkema Inc. With operations in more than 40 countries, some 14,000 employees and 10 research centers, Arkema generates annual revenue of EUR6.4 billion. Moody's Investors Service had upgraded Arkema S.A.'s senior unsecured rating to Baa2 from Baa3. The outlook on the rating was changed to stable from positive.
MRC