Braskem to cut gas price in line with those in the United States

MOSCOW (MRC) -- A drop in natural gas prices caused by a shale gas boom in the United States is hurting Brazilian petrochemical company profits by reducing pricing power and making them less competitive, Odebrecht CEO Marcelo Odebrech, according to Reuters.

Braskem SA, Brazil's state-controlled oil producer Petroleo Brasileiro SA are discussing a cut in the domestic natural gas price to bring Braskem's costs more in line with those in the United States, Odebrecht Chief Executive Officer Marcelo Odebrecht said at a Credit Suisse Group event. Braskem is Latin America's No. 1 petrochemical company. Petrobras, as Petroleo is commonly known, is the principal source of domestic and imported natural gas in Brazil.

Petrochemical producers around the globe are contending with increasingly competitive U.S. rivals, who have seen the cost of gas plunge as output of gas from unconventional shale reservoirs grows. Those lower costs have boosted U.S. exports and driven down prices worldwide.

Petrobras charged local distributors USD8.22 per million British Thermal Units (MBTU) of domestic natural gas in the third quarter. The benchmark U.S. Henry Hub price in the quarter was USD3.55 MBTU, 43% less than in Brazil. While prices have risen to about USD4.91 MBTU in the U.S., they are still 40% below Brazilian levels.

Prices helped cause Brazilian exports of styrene, polystyrene and ethylene fall 7.6 percent in 2013 while imports jumped 21%. Cheaper Brazilian natural gas would make it easier for Braskem and other producers to cut their prices, helping maintain export levels and make their products more competitive at home.

As MRC wrote before, Argentina's stock regulator has rejected as inadequate an offer from Brazil's Braskem, Latin America's largest petrochemical company, to buy the roughly 30% of the shares of plastic maker Solvay Indupa that are publicly traded.

Braskem is a Brazilian petrochemical company headquartered in Sao Paulo. The company is the largest petrochemical company in Latin America and one of the largest in the world. Braskem controls the three largest petrochemical complexes in Brazil, located in the cities of Camacari (Bahia), Maua (Sao Paulo) and Triunfo (Rio Grande do Sul). Besides these three petrochemical complexes, Braskem also controls a complex in Duque de Caxias (Rio de Janeiro).
MRC

MOSCOW (MRC) -- CB&I has been awarded a contract to provide pipe fabrication for Dow Chemical's US Gulf Coast investment program, reported CB&I on its site.

Dow's investment plan includes construction of a new propylene and ethylene production unit in Texas and four new polyethylene plants in Texas and Louisiana.

"CB&I's strategically-located fabrication facilities, production management systems and manufacturing technology give us the unique capability to provide complete piping solutions for major energy infrastructure projects," said Luke Scorsone, president of CB&I's fabrication services business.

"This distinct expertise offers our customers greater quality, efficiency and schedule reliability, and in turn, we help our customers get their products to market faster."

As MRC wrote earlier, in March 2013, Dow Chemical signed a long-term ethylene off-take agreement with a new Japanese joint venture that will allow the chemical producer to enhance its performance plastics franchise. The joint venture is being formed between Japanese companies Idemitsu Kosan and Mitsui & Co. to construct and operate a Linear Alpha Olefins unit on the US Gulf Coast.

CB&I is the most complete energy infrastructure focused company in the world and a major provider of government services.

The Dow Chemical Company is an American multinational chemical corporation headquartered in Midland, Michigan, United States. Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene (PP), and synthetic rubber. The company's more than 5,000 products are manufactured at 188 sites in 36 countries across the globe.
MRC

MOSCOW (MRC) -- PolyOne Corporation, a premier global provider of specialized polymer materials, services and solutions, has announced the launch of ECCOH XLS low smoke and fume, non-halogen formulation for flame retardant wire and cable applications, according to the company's press release.

This new moisture-cured solution from PolyOne helps manufacturers improve supply chain logistics to streamline manufacturing and optimize performance.

With the introduction of moisture-cured ECCOH XLS technology, wire and cable manufacturers can now choose the most cost-effective technology for specific production environments when selecting a low smoke and fume, non-halogen composition.

ECCOH XLS enables manufacturers to efficiently process a non-halogenated, flame-retardant material without capital investment in extra equipment or adding steps to complete crosslinking. The new offering was developed for applications including low-voltage power cables for building and construction use and specialty wire and cable for marine environments.

As MRC informed before, in summer 2013, PolyOne completed the previously-announced sale of its vinyl dispersion, blending and suspension resin assets to Mexichem for USD250 million in cash. The sale of PolyOne's last remaining resin production assets marks an important milestone in the company's ongoing specialty transformation that began in 2006.

PolyOne Corporation is a global provider of specialized polymer materials, services, and solutions. PolyOne is a provider of specialized polymer materials, services and solutions with operations in specialty polymer formulations, color and additive systems, polymer distribution and specialty vinyl resins.
MRC

MOSCOW (MRC) -- Reliance Industries Ltd. (RIL) said it has successfully commissioned its 395,000-t/y polyester filament yarn plant in Silvassa, India, the first in a series of planned petrochemical expansion projects announced earlier, reported Polyester.

"This plant will be the first 'zero-waste' plant globally from day one on account of total waste recycling," RIL said.

With completion of the polyester expansion, RIL's total polyester capacity has increased to 2.8-million t/y from 2.4-million t/y.

In 2012, RIL signed a USD2-billion equivalent loan with nine banks to help finance its petrochemical expansion projects. Among the projects are a cracker having over 1.5-million t/y of olefins capacity, a 1-million-t/y acetic acid plant and a 1.4-million-t/y paraxylene facility, all being built in Jamnagar.

As MRC informed previously, in October 2012, Reliance Industries announced its plans to expand capacity at its refineries in the western state of Gujarat. Earlier, Reliance had 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 which include polypropylene, polyethylene and polyvinyl chloride.
MRC

MOSCOW (MRC) -- Fourth quarter 2013 earnings were USD8.4 billion, down 16% from the fourth quarter of 2012. Full year 2013 earnings were USD32.6 billion, down 27% from 2012, according to the company's report.

ExxonMobil delivered strong business results in 2013 while remaining focused on improving profitability and long-term shareholder value. Disciplined use of capital, project execution and asset management are positioning the company to deliver sustained superior financial performance across the business cycle.

Over the next two years, ExxonMobil will start up numerous major projects delivering profitable new supplies of oil and natural gas while strengthening the company's refining and chemicals businesses, the company's statement reads.

Capital and exploration expenditures were USD9.9 billion in the fourth quarter and USD42.5 billion for the year, including USD4.3 billion for acquisitions.

In the fourth quarter 2013, the company's chemical earnings of USD910 million were USD48 million lower than the fourth quarter of 2012. Weaker margins, mainly in specialties, decreased earnings by USD70 million, while volume and mix effects increased earnings by USD50 million. All other items decreased earnings by USD30 million.

For the full year of 2013, Exxon's chemical earnings of USD3,828 million were USD70 million lower than 2012. The absence of the gain associated with the Japan restructuring decreased earnings by USD630 million. Higher margins increased earnings by USD480 million, while volume and mix effects increased earnings by USD80 million.

Dividends per share of USD0.63 increased 11% compared to the fourth quarter of 2012. In 2013, the corporation distributed USD26 billion to shareholders through dividends and share purchases to reduce shares outstanding.

As MRC wrote previously, ExxonMobil started operations at this ethylene steam crackers in Singapore in early 2013. The expansion is integrated with the existing petrochemical plant. Over the next few weeks, the petrochemical complex, powered by a 375-megawatt cogeneration plant, increased production at its three polyethylene plants, two polypropylene plants, a specialty metallocene elastomers unit and the expanded oxo-alcohol and aromatics units.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world"s oil and about 2% of the world's energy.
MRC