ORPIC awards two contracts for Liwa Plastics Project

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.
MRC

MOSCOW (MRC) -- SIBUR, Russia's largest manufacturer of expandable polystyrene (EPS), announced this week new prices for April shipments. The company intends to raise prices for the domestic market, while maintaining export prices intact, according to ICIS-MRC Price report.

The plant's April export EPS prices will remain unchanged compared with March. Spot prices for foreign markets will be USD1,970/tonne FCA, excluding VAT, from Perm warehouse (or USD2,000/tonne FCA Voronezh, excluding VAT).

In their turn, spot EPS prices for the domestic market will rise by USD1,000/tonne from 1 April, buyers said.

Buying activity has continued to increase in the EPS market by late March. Some market players said they expect a shortage of material in April on the back of a surge in demand from buyers and lower imports.
MRC

Moscow (MRC) - A significant increase in the price of low density polyethylene (LDPE) in the Ukraine, driven by the hryvnya devaluation, led to a significant drop in demand. However, Ukrainian market experiences a significant shortage of polyethylene, according to ICIS-MRC Price Report.

Significant depreciation of the national currency against the dollar, as well tightened conditions of currency purchases made Ukrainian companies sharply reduce the volume of LDPE imports, including Russia and Azerbaijan.

LDPE prices increased proportionally to the devaluation of hryvnya, which made local converters reduce PE purchases because of such a significant price rise.

However, converters faced a shortage of LDPE in the late March even amid weak demand for it. Supply of Russian LDPE to Ukraine reduced by almost one and a half times to 4,100 tonnes in the first two months of this year, from 7,800 tonnes in the same period of 2013. Supplies of Russian LDPE to the country over the three weeks of March was about 1,800 tonnes.

The second largest supplier of LDPE to Ukraine - Belarusian Polymir shipped quite a big volumes of the material (1,300 tonnes in February and 1,400 tonnes over three weeks in March), but the shortage continued to be felt in the market.

Russian producers announced further increase in LDPE price for April delivery to Ukraine, citing higher prices in the domestic market and scheduled maintenance works at the second largest LDPE producer - Kazanorgsintez. Although, Ukrainian company are not ready to accept Russian LDPE price increase because of the ongoing hryvnya devaluation. MRC analysts expect the shortage LDPE to be felt in the Ukrainian market in April too.

Price range for the 158 LDPE for CIS countries on the back of the dollar volatility in the last week of March was big enough at Rb21,000-23,000/tonne CPT Kiev, including VAT.
MRC