Total to partner on LNG with Chinese CNOOC

MOSCOW (MRC) -- Total signed an LNG cooperation agreement between it and China National Offshore Oil Corporation (CNOOC), seeking to strengthen the partnership between the two companies, said Hydrocarbonprocessing.

Under the terms of an existing 15-year contract, Total has been supplying China with up to 1 million tpy of LNG since 2010.

In addition to agreeing on a price review regarding this existing supply, the parties also set a framework for an additional supply of 1 million tpy of LNG as well as further cooperation throughout the LNG value chain.

Total already supplies more than 8% of the Chinese market, with 5 million tons of LNG already delivered between 2010 and 2014. In the coming years, the group is expected to benefit from additional supply sources in Australia, Russia and the US, complementing existing Middle East and African sources, in order to respond to China’s growing LNG demand.

"As a world leader in LNG, Total seeks to strengthen its position in Asia’s growing LNG markets, where China is among the largest players with 20% annual growth," said Yves-Louis Darricarrere, president of Total's upstream business. "This new agreement allows us to expand our LNG supply and reinforces our cooperation with Chinese companies."

As MRC wrote before, Technip has been awarded by CNOOC Oil & Petrochemicals Company a contract to supply its proprietary ethylene technology and process design package for a grassroots 100,000 tpy ethylene plant in Huizhou, Guangdong Province, China.

CNOOC is a pioneer of China’s LNG industry and the third largest LNG importer in the world with 13 million tons of LNG imported in 2013. Currently, CNOOC operates 6 LNG receiving terminals in Guangdong, Fujian, Zhejiang, Shanghai and Tianjin with further terminals under construction.

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.
MRC

MOSCOW (MRC) - INEOS has closed its ethylene and butadiene plants at the Grangemouth refinery and petrochemical plant in Scotland a year earlier than originally planned, saying that the plants were no longer commercially viable, said Reuters.

INEOS came to the brink of closing the refinery in a bitter industrial dispute last year, but agreed to keep the plant open after the workforce agreed to cuts to employment terms and conditions.

As part of a wider "Survival Plan", INEOS said it would close the G4 ethylene cracker and the BE3 butadiene plants, along with a naphtha cracker in 2015, but in a statement on Thursday the company said had closed the plants with immediate effect.

"Both G4 and BE3 plants are no longer commercially viable. Both facilities date from the 1960s and their closure is another key part of our survival plan," INEOS said in a statement.

A document seen by Reuters shows that BE3 will shut down on the week commencing April 7 and the G4 unit will close on the week starting April 14. The document states that the ethylene plant is losing around 1 million euros (USD1.4 million) per month.

Butadiene is the main petrochemical precursor material for rubber.

The Grangemouth site employs 1,400 people, including 700 at the petchem operations. Ineos under its ‘survival plan’ proposal was seeking to reduce the number of workers at the petchem operations by an unspecified number and make changes to the pension benefits. The proposed job cuts would not affect the refining operations, which are run by a joint venture between Ineos and PetroChina.

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) -- State-owned Oman Oil Refineries and Petroleum Industries Co (ORPIC) said it had awarded two contracts for construction of a USD3.6 billion plastics production complex, the Liwa Plastics Project, said Reuters.

Engineers India Ltd of New Delhi will operate the project management company, while the contract for front-end engineering and design was won by Netherlands-based Chicago Bridge & Iron Co, ORPIC said in a statement seen on Wednesday without giving the value of the deals.

The plant will be built in Oman's northern industrial city of Sohar, next to ORPIC's oil refinery and petrochemical plants. Pre-qualifying of companies to bid for the engineering, procurement and construction contract will be finished by the end of this year, ORPIC said.

The Liwa Plastics Project is due to be completed in 2018, doubling ORPIC's profitability by allowing it to extract more value from Omani crude oil and natural gas, the company said.

The project will boost ORPIC's annual production of polypropylene and polyethylene to 1.4 million tonnes, increasing Oman's exports, while additional production of 1 million tonnes of plastics will help to develop downstream industries within the country, ORPIC added.

ORPIC (Oman Oil Refineries and Petroleum Industries Company) is one of the leading companies in Oman and has two refineries in that country, in Sohar and Muscat. ORPIC is owned by the Government of the Sultanate of Oman and Oman Oil Company SAOC, the trading company created by the Government of the Sultanate of Oman for managing investments in the energy sector. We remind that in late 2012 Orpic announced that its production of world class high quality polypropylene homopolymer at Sohar plant has crossed 1 million tonnes. This was a significant milestone for the polypropylene (PP) plant in Sohar, which began production in October 2006.
MRC

MOSCOW (MRC) -- Ten years after the North American petrochemical industry was retrenching and rationalizing capacity, conditions have entirely reversed, and the surge could be even bigger than previously believed, said Hydrocarbonprocessing.

Jim Fitterling, Dow Chemical's executive vice president for feedstocks, performance plastics and supply chain, shared his positive viewpoint on the changing energy landscape at the IHS Chemical World Petrochemical Conference and Workshop on Wednesday.

Fitterling said the investments surge in petrochemicals may have been underestimated over the past two to three years. Over 120 new energy-related projects have been announced in North America, with nearly USD100 billion to be invested in these projects. More than one-third of the announced projects will be located in Texas and Louisiana.

Such a capacity ramp-up could set the US on the pathway to soon being a net exporter of petrochemicals, according to Fitterling.

This investment will occur in waves. The first wave was the investment by the upstream in finding and producing new reserves. The API predicts that nearly $5 trillion will be invested by the upstream through 2015.

The second investment wave involves the chemical and steel industries. “The energy revolution is real,” said Fitterling. For steel manufacturing, which is a high-energy consumer, the much energy rates support reduced per unit cost for US manufacturers. In fact, US energy costs are one-third to one-half less than in Europe.

In North America, 10 new ethylene crackers have been announced due to lower natural gas pricing; eight of the crackers are slated to be based in the US. Six of the proposed crackers have already moved beyond the feasibility stage.

In addition, 10 debottlenecking and/or revamp projects have also been announced. As such, there is enormous potential by the US petrochemical industry, Fitterling explained.

The third wave of investment will be by the downstream to use steam and power. And the fourth, or final, wave of investment will attract intellectual groups and more research and development (R&D) facilities to support the new manufacturing centers. To that end, Dow is planning a new R&D center to be built at Lake Jackson, Texas, to support the company’s manufacturing facility in nearby Freeport.

The next phase of prosperity for the petrochemical industry involves newly-available feedstocks, upgraded manufacturing facilities, and the continued advancement of intellectual properties and R&D.

As we remind before, Dow Chemical, the largest US chemical maker by sales, plans to separate chlorine-related assets including its epoxy business as the company focuses on higher-margin activities. The chlorine assets account for as much as USD5 billion of annual revenue and include plants at 11 sites employing almost 2,000 people, Midland.

The Dow Chemical Company is an American multinational chemical corporation. As of 2007, it is the second-largest chemical manufacturer in the world by revenue (after BASF) and as of February 2009, the third-largest chemical company in the world by market capitalization (after BASF and DuPont). Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber.
MRC

MOSCOW (MRC) -- Dow Chemical has recently presented a report on current developments at the huge Sadara facility, currently under construction in the port of Jubail, Saudi Arabia, reported GV.

The plant is the largest integrated petrochemical site to be constructed at one time.

114,000 t of steel, 700,000 m3 of concrete, 2,500 km of pipework, and 5,400 km of cable will be used in construction. The project is reported to be on time, on budget, and with a Best in Class safety record, which is an incredible achievement considering the project has mobilised 44,000 workers. The utilities and cracker are reported to be 68 % complete and the isocyanates plants are 48 % complete.

The first plant will be ready to operate mid-2015 with full production expected during 2016.

When completed, the site will employ 3,862 staff, many of whom are currently being trained at Saudi Aramco and Dow sites across the world. The site will have 26 process plants producing 3 million tonnes of products annually and generating annual sales revenues of USD 6-8 billion.

Sadara will be a game changer, according to Dow, as it is a fully integrated site with basic materials going directly to a PlasChem Park for formulation and compounding into higher value products. This also creates captive demand through a secure and reliable supply chain.

Dow has estimated that its share of the global MDI market will increase in Western Europe from 15% to 16%, in Middle East and Africa from 12% to 15%, in Eastern Europe from 27% to 30%, in Northern Asia from 4% to 6% and in Southeast Asia from 11% to 12% once Sadara is operational.

As MRC informed previously, in July 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.
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