Orpic to test bidders for USD3.6 bln Liwa Plastics in Oman

MOSCOW (MRC) -- Oman Oil Refineries and Petroleum Industries Company SAOC (Orpic), the Sultanate’s refining and petrochemicals flagship, has launched the process of prequalifying contractors for the construction phase of its USD3.6 bln Liwa Plastics Project (LPP), as per Oman Daily Observer.

The giant scheme is proposed to be established adjacent to the ongoing Sohar Refinery Improvement Project (SRIP) under way at the industrial port of Sohar. It features, among other things, a nominal 900,000 tpa ethylene cracking plant, HDPE plant, LLDPE plant, new polypropylene plant, MTBE plant, butene-1 plant and associated utility and offsite facilities. Also envisioned as part of this project is a Natural Gas Liquids extraction facility, which will be set up at Fahud and linked to the Sohar plant via a roughly 300km pipeline. Liwa petrochemical plant will be integrated with Orpic’s existing Sohar refinery, aromatics complex and polypropylene plant to create a massive petrochemicals complex within the industrial port.

A "Request for Information" has been issued to a number of local and international engineering contractors inviting them to affirm their interest in bidding for the multibillion dollar Engineering-Procurement-Construction (EPC) package of the mammoth petrochemicals project. Interested parties have until June 29, 2014 to respond to the "Request for Information", it is learnt. The Liwa Plastics Project, along with an array of equally substantial investments planned by Orpic and Oman Oil Company in Sohar and Duqm, promise to position Oman as a world-class petrochemicals producer of the future.

As MRC wrote before, Orpic, the Sultanate’s refining and petrochemicals flagship, intended to invest around USD3.6 bln in the development of a massive petrochemicals scheme that will form the cornerstone of an ambitious downstream plastics-based industry in Oman. When completed by 2018, the Sohar Plastics Project together with the refinery improvement venture, will produce one of the most efficient integrated refinery and petrochemical complexes in the world.

ORPIC was created in 2011 from the integration of Oman Refineries and Petrochemicals Co, Aromatics Oman and Oman Polypropylene. 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.

BASF strengthens performance materials production in China

MOSCOW (MRC) -- BASF, the world’s leading chemical company, has undertaken three key capacity expansion projects for performance materials at its Pudong site in Shanghai (China), reported the company on its site.

The capacity expansion projects includes Ultramid (polyamide, PA), Ultradur (polybutylene terephthalate, PBT), Elastollan thermoplastics polyurethane elastomers (TPU), and Technical Center and capacity expansion of Cellasto (microcellular polyurethane components).

"More than 60% of China’s people will live in cities by 2020. Supporting an environmentally-friendly path for urbanization presents a huge opportunity for chemistry as an enabler for sustainable innovations in areas ranging from industrial manufacturing to construction, transportation and consumer goods," said Albert Heuser, President, Greater China and Functions Asia Pacific, BASF.

BASF estimates the Asia Pacific market for engineering plastics will grow on average by about 7% per year. This growth is driven by the increasing usage of engineering plastics in various segments, including transportation, construction, high speed railway, as well as the electrical and electronics industry. Ultramid and Ultradur are used in automotive parts and innovative applications include seat structures, oil sump modules, sensors, engine mounts, connectors and highly integrated laser-structured electronic devices.

Additionally, according to China’s national New Urbanization Plan (2014-2020), with additional 100 million people living in cities by 2020, the percentage of more energy-efficient and environmentally-friendly buildings among newly constructed buildings in China will rise to 50% from 2% today. BASF recently introduced co-extrudable Ultradur to reinforce thermally insulated PVC window profiles, an important contributor to building energy efficiency.

The compounding plant’s total capacity for Ultramid and Ultradur compounds has doubled from currently 45,000 to more than 100,000 metric tons per year - making it BASF’ s biggest engineering plastics compounding facility in Asia Pacific. The expansion, which is operational more than six months ahead of schedule, also includes a compounding line for specialty grades that enables BASF to tap the burgeoning market potential for specialty applications. With this project and the new compounding plant in Yesan, Chung Nam Province, Korea, which is expected to begin operations from the end of 2015, BASF’s overall compounding capacities in Asia will increase from the current 130,000 to a total of 225,000 metric tons.

BASF has now completed a significant capacity expansion at its Shanghai-based Elastollan plant, which was established in 2007. Elastollan TPU is a versatile material that offers the highest innovation potential. It can be processed with different methods, including extrusion and injection molding as well as blow molding. The expansion of capacity for TPU in China will support growth of the rapidly growing market for textile, footwear, transportation, wire and cable sheathing and other industrial applications.

Besides, the new investment project includes the expansion of the Cellasto Asia Pacific Technical Center, the establishment of three new production lines, and the technical improvement of existing facilities. Cellasto is the customized solution for damping and reduction of the noise, vibration and harshness (NVH) level of vehicles. The production capacity will be doubled after the project completion in 2015.

Cellasto components are sold to the automotive industry mainly as jounce bumpers, top mounts and coil spring isolators for suspension, as well as other NVH parts. BASF currently produces Cellasto at six sites worldwide: Lemforde, Germany, Shanghai and Nansha, China, Guaratingueta, Brazil, Shinshiro, Japan, and Wyandotte, USA.

We remind that, as MRC reported earlier, BASF is building a new Ultramid polymerization plant with a capacity of 100,000 metric tons per year in Shanghai, China. The new plant is planned to start up in 2015.

BASF is the largest diversified chemical company in the world and is headquartered in Ludwigshafen, Germany. BASF produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries. BASF had sales of about EUR74 billion in 2013 and over 112,000 employees as of the end of the year.

Moodys downgrades Lanxess to Baa3

МOSCOW (MRC) -- Moody's Investors Service has today downgraded senior unsecured ratings of Lanxess AG and its subsidiaries to Baa3 from Baa2; the outlook was changed from negative to stable, said the agency in its press release.

The downgrade of the ratings reflect weaker business fundamentals in rubber markets, one of the core businesses of Lanxess, and the expectation that Lanxess will be executing a sizable restructuring programme over the next several years to regain its competitiveness and profitability in the segment. In May 2014, the company raised EUR 430 million in equity capital and part of it will fund the costs of the forthcoming restructuring measures.

"Following a period of expansionary growth in 2010-2013, that has left the company with a weak balance sheet and a less competitive cost position, Lanxess has now shifted its strategic focus to operating and financial consolidation. Because we expect a slow pace of recovery in its core rubber markets, the forthcoming restructuring will be the main driver of the targeted improvement in the operating and financial profiles of the group over the next few years," said Elena Nadtotchi, Vice President - Senior Credit Officer and the lead analyst for Lanxess AG at Moody's. "At Baa3 level, the rating is positioned to accommodate restructuring charges and portfolio/ capacity measures that will likely cap the pace of improvement in the earnings and operating cash flow generation in the next few years. This recent equity funding, however, is a strong credit supportive feature that underpins the investment grade Baa3 ratings and the stable outlook during this transitional period".

As MRC wrote previously, last July, 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.

Lanxess is a leading specialty chemicals company with sales of EUR 8.3 billion in 2013 and roughly 17,300 employees in 31 countries. The company is currently represented at 52 production sites worldwide. The core business of Lanxess is the development, manufacturing and marketing of plastics, rubber, intermediates and specialty chemicals.


Bengal government terminates stake sale process in Haldia Petrochemicals

MOSCOW (MRC) -- The Bengal government has terminated the stake sale process in Haldia Petrochemicals (HPL), cited legal issues for cancelling the bid, said Plastemart.

Sources say IOC is unlikely to legally confront the government’s decision even though they expressed disappointment over the development. However as per a source, Indian Oil had pulled out of the race via a written letter before the elections, saying the company was no longer interested.

Since there was no other bidder, scrapping the divestment process was just a mere formality. In its letter written in March to the West Bengal Industrial Development Corporation, IOC raised concerns over the inordinate delay in concluding the deal. IOC’s bid to buy shares at Rs 25.10 per share was opened on October 10, 2013. The PSU in the letter had indicated that the price quoted in the tender "may not be valid" because of the heavy losses suffered by HPL in the interim period. This could indicate that TCG is set to takeover Haldia Petrochemicals Ltd, and its chief Purnendu Chatterjee is likely to become the chairman. According to sources, TCG has also presented a number of conditions to the Bengal government for taking over HPL and the details are being worked out. IOC continues to hold an 8.89% stake in the company.

Haldia Petrochemicals Ltd is a modern naphtha based petrochemical complex at Haldia, West Bengal, India. Haldia has played the role of a catalyst in emergence of more than 500 downstream processing industries in West Bengal with a capacity to process more than 3,50,000 TPA of polymers, among which are polyethylene (PE) and polypropylene (PP)


Borealis divests joint-ownership share in Le Havre urea production plant

MOSCOW (MRC) -- Borealis, a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers, has announced that its French subsidiary Borealis Chimie divests its joint-ownership share in the Le Havre urea production plant and related ammonia storage facility at Gonfreville l'Orcher, France, as per the company's press release.

Following the divestment, the plant and related storage facility will be fully owned by Yara France, who already owns the remaining share and operates these facilities. Through the 2013 acquisition of GPN SA, subsequently renamed Borealis Chimie SAS, Borealis also assumed the 52.15% joint-ownership share in the Le Havre urea plant, which has an annual production capacity of 320,000 tonnes, and a 37.5% stake in the related ammonia storage facility.

Borealis management has now taken the decision to divest its joint-ownership share in order to concentrate on its 100%-owned industrial sites and, in the case of existing partnerships, to give precedence to less restrictive legal forms. The divestment also includes the supply of urea by Yara to Borealis during a transition period in order to ensure continuity in product delivery. The divestment will not have an impact on Borealis employees.

"The strategic decision to conclude this transaction with Yara allows us to concentrate on our wholly-owned fertilizer production locations in France," explains Gerald Papst, Borealis Vice President Business Unit Fertilizer.

Borealis is the largest producer of nitrogen fertilizers in France and employs approximately 940 people. Borealis in France operates three production sites in Grand-Quevilly, Grandpuits and Ottmarsheim, as well as a storage site at La Rochelle. A turnaround currently in progress at Borealis Grand-Quevilly will improve the efficiency and reliability of the site and involves an investment of EUR 60 million in the renewal and maintenance of equipment.

As MRC informed previously, Borealis got the first drops of ethylene flowing in late May from a plant expansion in the emirate costing more than USD4 billion. The expansion project began in 2009. Annual capacity at Borouge, about 155 miles (250 kilometers) from the city of Abu Dhabi, will more than double to 4.5 million tons from 2 million tons of ethylene and the derivative polyethylene and polypropylene plastics used in car parts and packaging.

Yara delivers solutions for sustainable agriculture and the environment. Founded in Norway in 1905, Yara has a worldwide presence with sales to 150 countries.

Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. The only polyethylene (PE) producer in Sweden, Borealis’ Stenungsund facilities include a PE plant, a cracker for ethylene and propylene production, and an innovation center focused on research and development for infrastructure markets.