Shell maintains SM supply to customers despite force majeure at Singapore JV plant

MOSCOW (MRC) -- Shell is continuing the supply of styrene monomer to its customers despite having its own supply from Singapore-based joint venture plant Ellba Eastern halted, reported Apic-online with reference to a spokeswoman for Shell.

"Shell has not declared force majeure on its customers. We continue to closely monitor the situation," she said.

Ellba Eastern on Monday declared force majeure on SM supply to its owners Shell and BASF. The plant at Jurong Island can produce 550,000 mt/year of SM and 250,000 mt/year of propylene oxide.

This led BASF, which holds a 50% stake in Ellba Eastern, to declare force majeure on SM supply from Singapore to its customers.

Shell however, has another plant at Jurong Island which can produce 350,000 mt/year of SM and 175,000 mt/year of propylene oxide, allowing it to continue supplying to its customers.

In addition, Shell has other SM production facilities in Asia, including joint ventures in Saudi Arabia and China, providing alternative supply sources.

As MRC informed previously, earlier this year, Royal Dutch Shell took a final investment decision tol increase production capacity at its Singapore petrochemical plant to meet demand for specialized materials used in the automotive and furniture industries. The upgrade will increase the plant's capacity to produce polyols -- industrial chemicals used to make high-quality foams - by more than 100,000 metric tpy to 360,000 tpy. The project is expected to be completed in 2014.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.

Total to lower investments starting in 2014

MOSCOW (MRC) -- French oil company Total, Europe’s third-largest oil company, has reiterated its hydrocarbon production targets for the medium term, thanks to a strong investment push over the past years which should start to trend down from next year, reported Hydrocarbonprocessing.

In a presentation to investors, Total said it anticipates a strong increase in cash flow from the start-ups of major oil and gas extraction projects, as well as from the restructuring of its downstream businesses -- refining and chemicals, and marketing and services.

The world's fifth largest nonstate oil company by output, Total has embarked upon an ambitious plan to restore profitability for its loss-making refining businesses, at the same time as making a huge investment push to search for new oil and gas, which is now more difficult to find as it is rarer and lodged in remote areas such as deep offshore or off the Arctic circle.

The plans highlight the French group's intensive efforts to maintain and even reinforce its global position, as competition around the world has grown fierce over the past few years against a background of rising costs to produce oil and gas, the race for new hydrocarbon sources to address growing emerging markets' appetite, while facing the decline of crisis-hit Europe.

In the coming months, the group should start-up numerous production projects. The restructuring of refining and chemicals "has begun to bear fruit," as profitability is increasing towards the target of 13% return on average capital employed set for 2015, Total said.

As MRC informed previously, Total intends to invest EUR160m before 2016 to adapt its petrochemical platform in Carling, in the Lorraine region of eastern France, and to restore its competitiveness. The company plans indeed to develop new activities on the platform in the growing markets for hydrocarbon resins (Cray Valley) and for polymers, while shutting down the acutely loss-making steam cracker in the second half of 2015. 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. These chemicals are used to make plastics.

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.

Amcor negotiating to buy Indian packaging business

MOSCOW (MRC) -- Flexible packaging giant Amcor Ltd. is looking to expand in India through another acquisition.
Melbourne, Australia-based Amcor is negotiating with Chennai, India-based Murugappa Group to buy its Tuflex division, which makes flexible packaging, said Plasticsnews.

"We have signed an agreement in July to purchase flexible packaging plant located in Gujarat," said Ralf Wunderlich, president & managing director of Amcor Flexible Asia Pacific, in an email response to questions from Plastics News from his Singapore office.

Amcor is looking for bigger presence in Indian USD30 billion packaging sector, which is growing 12% annually.
"We are looking forward to closing this transaction soon," Wunderlich said.

Terms of the deal were not disclosed.

Amcor acquired Uniglobe Packaging Ltd. last year and before that Alcan Packaging — which included operations in India — in 2009. Amcor has plants in Daman, Chaken and Haridwar, India.

Amcor Limited is an Australian-based multinational packaging company. It operates manufacturing plants in 42 countries. It is the world's largest manufacturer of plastic bottles.

Chevron inches closer to Ukraine shale deal

MOSCOW (MRC) -- Ukrainian government on Friday moved closer to a new shale gas deal for the country when a regional council approved its draft for a production-sharing agreement with US energy company Chevron, said Upstreamonline.

Deputies in the western Ivano-Frankivsk region had sent the draft back to the government a month ago, pressing for guarantees that the environment would be adequately protected during exploration and for a commitment to allocate 10% of any gas produced for local consumption.

Interfax news agency said on Friday deputies had voted 62-to-1 in favour of an amended government draft, with 11 abstentions. The approval of a second council in the neighbouring Lviv region is required before the government can go ahead and sign an agreement with Chevron.

"Ivano-Frankivsk has given its go-ahead for the project. Now it's the turn of Lviv," Stavitsky said. Chevron wants to tie up a deal to explore the Olesska shale field.

Anglo-Dutch supermajor Shell has already signed a USD10 billion deal for shale exploration and extraction at the Yuzivska field in the east of the ex-Soviet republic.

The Kiev government sees shale gas development as important for easing its dependence on costly gas imports from Russia which weigh heavily on its economy, Reuters reported.

But deputies had expressed concerns over the ecological consequences of shale exploration in the mountainous forest region which is known for tourist resorts. Fracking has sparked opposition from environmentalists elsewhere in Europe who fear it could pollute underground water.

Stavitsky told Reuters the deputies demand for 10% of the gas to be earmarked for local consumption had been met. "The condition about the 10% was agreed," he told the news agency.

Apart from shale gas exploration, Ukraine is hoping to find alternative energy sources through offshore exploration and liquefied gas deliveries from other foreign suppliers.

LANXESS increases competitiveness

MOSCOW (MRC) -- LANXESS, German specialty chemicals company, is countering the challenging business environment with a comprehensive efficiency program, according to the company's press release.

Currently, it is foremost the synthetic rubber activities that are experiencing a temporary weakness in demand, increased competition in the market and volatile raw materials prices. As part of the "Advance" program, the company therefore plans to reduce costs and headcount, as well as optimize its portfolio.

"Due to the current situation we must now take action," said LANXESS’ Chairman of the Board of Management, Axel C. Heitmann, at today’s Media Day. "We have a strong track record of managing our business in challenging economic environments. We will undertake all necessary steps in order to return to sustainable and profitable growth as soon as possible. We are seeing first signs of stability in the market but it is too early to say when and how quick a recovery will take hold."

Heitmann confirmed the company’s full-year guidance for 2013 of EUR 700-800 million EBITDA pre exceptionals, excluding potential inventory devaluations.

As part of the "Advance" program, LANXESS is aiming to achieve about EUR 100 million in annual savings from 2015 onward through efficiency improvements and targeted restructuring. This will lead to a headcount reduction of about 1,000 employees worldwide by the end of 2015.

Restructuring has already been implemented within the Rubber Chemicals business unit, which is closing a site in South Africa and downsizing its operations in Belgium. In addition, LANXESS will adjust its business operations globally to reflect the current market situation. The company will also continue with its proven flexible asset management strategy.

In total, some EUR150 million in one-off charges will be booked in 2013 and 2014 to cover the "Advance" program.

LANXESS will maintain its current structure of 14 business units under its three established segments. At the same time, the company is pursuing strategic options for specific non-core businesses.

As part of its portfolio management activities over the mid- to long term, LANXESS is predominantly targeting acquisitions that will strengthen its Advanced Intermediates and Performance Chemicals segments and thus further diversify the Group’s structure.

LANXESS is currently pushing ahead with three important investment projects serving the megatrend mobility. They are a neodymium polybutadiene rubber (Nd-PBR) plant in Singapore, an ethylene propylene diene monomer (EPDM) rubber plant in China and a polyamide plant in Belgium. Construction is progressing according to plan.

As MRC wrote before, LANXESS celebrated the opening of its first production facility in Russia. In the new plant at the Lipetsk site, LANXESS subsidiary Rhein Chemie manufactures polymer-bound rubber additives for the markets in Russia and the Commonwealth of Independent States (CIS), primarily for the automotive and tire industries. A production facility for the bladders used in tire production is to be added in 2016. The overall investment volume in euros amounts to a seven-digit figure and 40 new jobs will be created at the new plant in the medium term.

LANXESS is a leading specialty chemicals company with sales of EUR 9.1 billion in 2012 and roughly 17,400 employees in 31 countries. The company is currently represented at 50 production sites worldwide. The core business of LANXESS is the development, manufacturing and marketing of plastics, rubber, intermediates and specialty chemicals.