SIBUR launches construction of ZapSibNeftekhim

MOSCOW (MRC) -- SIBUR launches construction of ZapSibNeftekhim,a facility for deep hydrocarbon to polyolefin processing, on 17 February 2015, said the company in its press release.

ZapSibNeftekhim's project is designed to operate a steam cracker (by Linde AG, Germany) with a capacity of 1.5 mtpa of ethylene, around 500 ktpa of propylene and 100 ktpa of butane-butylene fraction (BBF), along with units with a total capacity to produce 1.5 mtpa of various grades of polyethylene (by INEOS, UK) and a polypropylene unit of 500 ktpa (by LyondellBasell, Netherlands).

The project is aimed at developing SIBUR’s deep processing operations, focussed on significant volumes of oil and gas exploration by-products in West Siberia, including associated petroleum gas, and import substitution of those polymers highest in demand on the Russian market.

ZapSibNeftekhim will be located on the Tobolsk production site where the Tobolsk-Neftekhim and Tobolsk-Polymer facilities are already operating. Tobolsk-Neftekhim's gas fractionation capacity has been significantly expanded specifically for the project. A raw NGL pipeline has been constructed between the Purovsky Gas Condensate Processing Plant and Tobolsk-Neftekhim, and the private Denisovka station on the Sverdlov Railway has doubled its carrying capacity.

Previously total investment in the ZapSibNeftekhim project has been estimated at approximately USD 9.5 bn, including expenditure incurred and costs budgeted for commissioning, production site infrastructure development and other activities.

Dmitry Konov, CEO of SIBUR, said: "ZapSibNeftekhim is SIBUR's key investment project. We have purposefully slowed down our project investment programme in the current economic environment to avoid the risk of significant shifts in the schedule in the future. Flexible schedule ensures that the Company can maintain financial stability in a changing economic environment, and guarantees completion of the project."

SIBUR is a vertically integrated gas processing and petrochemicals company. SIBUR owns and operates Russia’s largest gas processing business in terms of associated petroleum gas processing volumes and is a leader in the Russian petrochemicals industry. SIBUR operates 26 production sites in various regions of Russia. The Group employs 26,000 people. The Company sells its products to over 1,400 major customers engaged in the energy, automotive, construction, fast moving consumer goods (FMCG), chemical and other industries in approximately 70 countries worldwide.

HDPE imports to Russia decreased by 32% in January 2015

MOSCOW (MRC) - The devaluation of the rule and the growth of domestic production were the main reason of a serious drop in imports of high density polyethylene (HDPE) in January 2015. HDPE imports decreased to 13,300 tonnes in January 2015, down 32% compared to January 2014, according to MRC DataScope.

A significant devaluation of the rouble against the main world currencies, as well as the growth of the domestic production of HDPE for extrusion coating of large-diameter pipes and pipe HDPE were the main cause of a serious decline in imports. January imports of HDPE in the country decreased to 13,300 tonnes, compared with 19,500 tonnes in January 2014, and 25,400 tonnes in December 2014. Structure of HDPE imports over the reported period was as follows.

January imports of HDPE for pipe extrusion fell to the lowest in the last few years to about 922 tonnes, compared with 4,100 tonnes in January 2014, and 4,000 tonnes in December 2014. Local pipe producers because of the high price of imported material almost completely switched to Russian polyethylene; the producers have significantly increased pipe HDPE production.

January imports of HDPE for extrusion coating of large-diameter pipes were 4,600 tonnes, compared with 7,200 tonnes in January 2014, and 9,600 tonnes in December 2014. The main reason - the growth of domestic production of this type of polyethylene, in particular, Metakley produced more than 20,000 tonnes in 2014 of polyethylene.

Imports of injection moulding HDPE remained at a high level because of the small volume of production in Russia. January imports of injection moulding HDPE were 4,200 tonnes, compared with 4,400 tonnes in January 2014 and 4,900 tonnes in December 2014. January imports of HDPE for extrusion blowmoulding decreased to 2,600 tonnes compared with 3,700 tonnes in December 2014 (1,900 tonnes in January 2014).
The main reason for the decline in import volumes - low seasonal demand.

The total volume of HDPE imports in other sectors of consumption in January 2015 slightly exceeded 1,000 tonnes.


Aramco, Dow to start Sadara Chemical in 2015

MOSCOW (MRC) -- Saudi Arabian Oil Co. and its partner Dow Chemical Co. plan to start production this year at their $20 billion Sadara chemicals joint venture as other projects being planned in the region face the obstacle of falling crude prices, said Hydrocarbonprocessing, citing Khalid Al Hamid, manager for engineering and technology.

Ethylene and polyethylene will be the first products of Sadara Chemical Co., Khalid Al Hamid, manager for engineering and technology, said in Dubai. Full output is set for late 2017.

Saudi Arabia, the world’s largest crude exporter, started the petrochemical project in 2011 when oil averaged USD111/bbl. Prices have since slumped about 45%. Qatar Petroleum and Royal Dutch Shell ended plans last month to build a USD6.5 billion petrochemical plant, saying it was "commercially unfeasible" in the current energy market.

“Middle East chemicals projects are facing stiff review," said Sanjay Sharma, vice president for Middle East and India at Englewood, Colorado-based IHS Inc. "Industry does not need to react to the short-term swing and needs to look long-term for projects as the market will return."

Middle Eastern petrochemical plants, which use natural gas, are becoming less competitive than plants that use oil after crude prices declined, Sharma said. Chemical prices are also falling because of lower oil prices, he said. Sadara will be the first plant in the Middle East to use naphtha, a refined oil product, Al Hamid said.

Saudi Arabia is boosting capacity to refine oil and produce chemicals to meet domestic fuel demand and make materials used to manufacture consumer goods. The kingdom plans to build refineries and chemical plants to help diversify the economy and reduce dependence on crude exports.

Sadara Chemical Company is a joint venture between Saudi Aramco and Dow Chemical. The Sadara complex, which will have 26 manufacturing facilities, is claimed to be the world's largest petrochemical facility ever built in a single phase and will manufacture more than three million tonnes of chemical and plastics products.

Total to build new PS plant in China

MOSCOW (MRC) -- French Total, Europe’s third-largest oil company, is in plans to start a new polystyrene (PS) plant in China, reported Apic-online.

A Polymerupdate source in China informed that the plant is lanned to be started in September 2015.

To be located at Ningbo, China, the plant is expected to have a production capacity of 200,000 mt/year.

As MRC informed previously, Total will permanently shut its high density polyethylene (HDPE) line in Belgium. The plant will be shut owing to weak margins which have arisen on account of cheap imports in the region. Located at Antwerp in Belgium, the line has a production capacity of 70,000 mt/year.

Besides, Total intends to invest EUR160m before 2016 to adapt its petrochemical platform in Carling, in the Lorraine region of eastern France, and to restore its competitiveness.

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.

Showa Denko mulls thermosetting bulk molding compound plant in Zhuhai, China

MOSCOW (MRC) -- Showa Denko (SDK) has decided to establish a new production site for thermosetting bulk molding compound (BMC) in Zhuhai, Guangdong Province, China, jointly with Eternal Materials Co., Ltd., a synthetic resin manufacturer based in Taiwan, said Plastemart.

SDK Group aims to strengthen its BMC business through this establishment of its second BMC production site in China.

BMC is a thermosetting bulk molding compound made from unsaturated polyester resin as main component, kneaded together with glass fiber and other additives. BMC is used as headlamp reflectors and engine covers for car applications, and encapsulation material for home electrical appliances and precision parts. BMC is also expected to be used much more as encapsulation material for motors installed in electric vehicles and hybrid vehicles. On molding BMC parts, BMC is required to have thermal resistance, water-resistance, electric properties, and dimensional accuracy. SDK Group has high competitiveness not only in its ability to produce and market BMC, but also in its capability to design customized BMC molded parts to satisfy customer's requirements.

As MRC wrote before, Showa Denko is in plans to shut its vinyl acetate monomer (VAM) plant for maintenance turnaround in March 2015. It is planned to remain off-stream for around one month. Located at Oita in Japan, the plant has a production capacity of 175,000 mt/year.

Showa Denko K.K. is mainly engaged in the petrochemical business. The Petrochemical segment manufactures and sells olefin, organic chemicals and others. The Chemical Product segment supplies chemicals, industrial gases, special gas and functional drug for semiconductors, functional high molecular materials, among others.