Formosa Plastics mulls plant construction in Louisiana to produce ethylene from shale gas

MOSCOW (MRC) -- Taipei- Formosa Plastics is considering construction of a plant in Louisiana to produce 1.2-million t/y of ethylene from shale gas, reported Taipei Times with reference to Formosa Plastics Chairman Lee Chih-tsuen's statement.

Lee, in addressing company employees, said Louisiana Governor Bobby Jindal had visited the company’s Taipei headquarters to urge Formosa to invest in Louisiana, in addition to its plans to invest in Texas.

To take advantage of US shale gas, Formosa has already announced plans to invest more than USD1.7-billion at its Point Comfort, Texas, complex to add an 800,000-t/y olefins cracker, an associated 600,000-t/y propane dehydrogenation unit and a 300,000-t/y low-density polyethylene plant.

With respect to a project in Louisiana, Lee said further studies must be conducted before an investment decision can be made. He noted, however, that the "costs for making ethylene with shale gas are one-third of the costs to make ethylene using other raw materials."

As MRC wrote previously, in November, 2013, Formosa Plastics was seeking United States permits for a USD2 billion expansion of its Texas operations as cheaper natural gas prices make US production more competitive. The company asked federal and state environmental regulators to approve plans for an ethane cracker unit and downstream derivatives.

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) -- Industries Qatar plans several lengthy shutdowns of its petrochemical and steel product plants in Q1-2014, as per Reuters.

Shutown of 200 days is being planned at the Qatari plants in the first three months of this year, compared to 59 days of closures in Q1-2013. The planned shutdown schedule published by IQ is as follows, with the comparative shutdowns for Q1-2013 in parenthesis:

Ethylene: 35 days (Q1, 2013: 0 days)
Low density polyethylene (LDPE): 34 days (Q1, 2013: 11 days)
Linear low density polyethylene (LLDPE): 11 days (Q1 2013: 0 days)
Methanol: 10 days (Q1 2013: 0 days)
Methyl tertiary-butyl ether (MTBE):8 days (Q1 2013: 0 days)
Ammonia: 40 days (Q1 2013: 1 day)

As MRC informed previously, Qatar Vinyl Company (QVC) is expected to shut its ethylene dichloride (EDC) and vinyl chloride monomer (VCM) plants for maintenance. Located at Mesaieed Industrial city in Qatar, the EDC and VCM plants have production capacities of 500,000 mt/year and 300,000 mt/year, respectively. Both the plants are likely to be taken off-stream for a maintenance turnaround in March 2014. The period of the shutdown could not be ascertained.
MRC

MOSCOW (MRC) - Export prices of Chinese polyethylene terephthalate (PET) for the CIS countries last week were reduced by USD15-30/tonne on the back of falling prices of paraxylene and PTA, according to ICIS-MRC Price Report.

Chinese producers had to reduce PET chips prices on the back of falling spot price for paraxylene (down USD40/tonne) and PTA (down by USD19-20/tonne). Last week price for PET in the Chinese port was in the range of USD1, 280-1,310/tonne FOB China. Converters in CIS countries also reported the reduction in Chinese PET; last week Chinese PET price dropped to USD1,320-1,350/tonne CFR Vostochny, excluding VAT.

However, price of Chinese PET in the port of Odessa was heard at USD1,370-1,390/tonne CIF Odessa, excluding VAT (shipping in the first half of February). Some converters reported price offer for PET at USD1,360/tonne CIF Odessa, excluding VAT.

It should be noted that during last year the export prices of PET in China and Korea fell more than by USD270/ tonne (down 17%). By the middle of January 2013 PET price in Asia were at USD1,586/tonne FOB, excluding VAT. Price offer for feedstock (paraxylene, PTA and MEG) also had been falling over the last year.

Some market players expect PET chips price to continue to fall in 2014on the back of capacities surplus in China. Sellers also reported a high level of competition amid low profitability, and some plants have already been working at a loss. A market player said that price does not depend on demand and supply any more, but on feedstock price. At the moment, the main driver is the feedstock price.


MRC

MOSCOW (MRC) -- India’s Reliance Industries is looking to acquire a stake in Venezuela’s Carabobo heavy oil field in a potential farm-in deal whereby it would take over the stake of Petronas, according to Upstreamonline.

The privately-owned energy giant, controlled by billionaire Mukesh Ambani, operates the world's biggest refining complex in western India and is hunting for cheaper, heavier crude to feed its refineries, which account for the lion’s share of its revenue.

Reliance signed a 15-year deal to buy up to 400,000 barrels per day of heavy oil from Venezuela’s state-run oil company PDVSA in 2012 and now is apparently looking to participate in the Petrocarabobo joint venture that operates the Carabobo-1 heavy oil project in the Orinoco belt.

The project plans to invest around USD20 billion over 25 years and involves building a 200,000 barrel-per-day upgrader to convert heavy crude into light crude oil.

Malaysia's Petronas said in September it is exiting the Petrocarabobo venture after what sources said were disagreements with Venezuelan authorities and PDVSA.

PDVSA has a 60% stake in the venture while Repsol, Petronas and Indian state-owned Oil & Natural Gas Corporation each own 11%, with Oil India and India Oil Corporation holding 3.5% apiece.

Reliance is also examining a possible entry into the Ayacucho-8 block in a joint venture with PDVSA, Bam said.

Reliance is also looking at exploration opportunities in Mexico after recent regulatory changes there but has so far not committed any investments in that country, he said. Reliance currently buys 60,000 bpd of oil from Mexico.

As MRC reported earlier, Reliance Industries plans to expand capacity at its refineries in the western state of Gujarat. In 2012, the company unveiled an USD18 billion investment plan for India over the next five years.

Reliance Industries is one of the world"s largest producers of polymers. The company's polymer production in 2010-11 (polypropylene, polyethylene and polyvinyl chloride) made 4,094 kilo tonnes.
MRC

MOSCOW (MRC) - Saudi Basic Industries Corp (SABIC), one of the world's largest petrochemical groups and the Gulf's biggest listed firm, reported a 5.7% rise in fourth-quarter net income, missing analysts' forecasts, said Reuters.

The company's results are closely tied to global economic growth because its products - plastics, fertilisers and metals - are used extensively in construction, agriculture, industry and the manufacture of consumer goods.

It earned 6.16 billion riyals (USD1.64 billion) in the quarter, up from a slightly revised figure of 5.83 billion riyals a year earlier. Seven analysts polled by Reuters had forecast, on average, that SABIC would record a net profit for the quarter of 6.58 billion riyals.

Operating profit rose much more slowly than net profit in the fourth quarter, edging up just 0.5% to 10.30 billion riyals.

U.S. production of shale gas has emerged as a major challenge for SABIC, threatening to make its American rivals more competitive, but Chief Executive Mohamed al-Mady said shale output would not become heavy before 2016, so the market would remain firm in 2014 and 2015.

He later told Reuters that Europe appeared to be recovering from its long economic slump so the petrochemical market there was improving, and he expected further strength.

Asked about SABIC's approach to acquisitions, Mady said it was opportunistic, but he stressed that the company was very interested in investing in the United States and China.

For the whole of 2013, net profit climbed 1.8% to 25.23 billion riyals, while company officials said sales were roughly flat at about 189 billion riyals.

As MRC wrote before, SABIC opened a new engineering thermoplastics compounding facility and a polypropylene compounding plant at its manufacturing facility in Jubail, Saudi Arabia. The products to be manufactured at the new facilities are aimed for the consumer electronics, healthcare, transportation, building and construction industries.
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