MOL exercises squeeze-out right for TVK shares

MOSCOW (MRC) -- Hungarian oil and gas company MOL said yesterday that it is applying its squeeze-out right for shares of petrochemicals company TVK, reported Hungarian news agency MTI.

The agency added that MOL wound up a voluntary public purchase offer for the shares on Friday, raising its stake in TVK from 94.86% to 99.1%, providing all preconditions were met.

In the squeeze-out, which runs until March 23, MOL is offering shareholders the same price as in the public purchase offer: HUF 4,984, MTI added.

As MRC informed before, MOL made a voluntary public tender offer on petrochemical works TVK. It bid HUF 4,984 for each of the outstanding ordinary shares of TVK based in Tiszaujvaros in eastern Hungary.

Tiszai Vegyi Kombinat (TVK) is a Hungarian manufacturer of olefins and polyolefins such as polyethylene and polypropylene. Feedstock is supplied by MOL of which TVK is a subsidiary and which also processes a major portion of resulting by-products from the olefins plant.

MOL previously said Hungarian authorities had dismissed the allegations against MOL, which now holds a 49.1% share of INA. Hungary's government holds a 24.6% stake in MOL.

MRC

Braskem sees Peru polyethylene project costs rising

MOSCOW (MRC) -- Braskem expects costs to rise for a petrochemical project on Peru's south coast, said Bnamericas, citing the company's country manager said.

The 1Mt/y polyethylene plant, originally calculated to cost USD3.5bn, may now require as much as USD5bn in project financing as potential locations such as the southern port of Matarani lack infrastructure, qualified personnel and services, Braskem's Jaime Quipusco told BNamericas.

Sao Paulo-based Braskem, which in 2011 signed an MOU for the project with Peru's state oil company, Petroperu, is waiting for the government to decide on a location for a petrochemical cluster, Quipusco said in an interview on the sidelines of an energy event in Lima.

Braskem, which needs 65,000b/d of ethane, has also yet to line up an ethane supply contract from Camisea gas fields operator Pluspetrol, Quipusco added. Once a port has been chosen, the company would take two years to carry out studies and four years to build a plant similar to its USD4.5bn Etileno XXI facility currently under construction in Veracruz, Mexico, he said. Companies exploring around the Camisea fields in the Ucayali basin may also increase natural gas resources, currently calculated at 16.7Tf3 (473Bm3), he said.

"The cost of ethane, low natural gas prices and the fact the government is in its last year are all factors to be taken into account," Quipusco said. "If we take the decision today, the situation could improve in six years' time."

Peru, which aims to corner 50% of the total polyethylene resin market in South America, last year awarded a USD3.6bn natural gas pipeline to link Camisea to the south coast. But delays in guaranteeing gas supplies has set back petrochemical projects proposed by CF Industries, Orica and Chile's Sigdo Koppers.

President Ollanta Humala said last week his government was still aiming to obtain commitments for a petrochemical cluster before he steps down in July 2016 following April general elections.

As MRC informed before, Braskem announced its plans for the construction of an Ultra High Molecular Weight Polyethylene (UHMWPE) plant at its site in La Porte, Texas.

Braskem is Brazilian main producer of polyethylene and polypropylene. In addition with ongoing plants located in both petrochemical complexes, in April 2008 Braskem opened a 300,000 metric ton polypropylene plant in the city of Paulinia (Sao Paulo).

MRC

Arkema announces the acquisition of Oxido

MOSCOW (MRC) -- Arkema, a France-based chemical manufacturer and the world’s second leading producer of organic peroxides, has reinforced its organic peroxide operations with the acquisition of Italian company Oxido, a European player in the formulation of organic peroxides used primarily in synthetic rubber crosslinking, according to the company's statement.

This company specializes in the formulation of organic peroxides used in the crosslinking of rubber and plastics, as well as initiators for polyester resins and hardeners, and generates sales of some EUR20 million.

With this acquisition which offers significant synergies, along with the project to increase production capacities currently underway in China and due to come on stream early 2016, Arkema strengthens its position as a leading player in organic peroxides, and offers an even more extensive range of products for growing sectors such as cable, automotive and construction.

This acquisition will also help support the downstream integration of its organic peroxide productions in Europe, in particular bis-peroxide for which capacities were recently increased as part of the development plan launched in 2013 at its Spinetta (Italy) and Franklin (US) plants to meet the steady growth of the synthetic rubber industry. Hence Arkema consolidates its world leading position in bis-peroxide production with its Luperox and Vulcup brands.

With this acquisition, Arkema now manufactures organic peroxides on 12 sites around the world.

As MRC reported earlier, in January 2014, Arkema announced the construction of a new organic peroxide plant on its Changshu site in China. This investment helped to double the site’s production capacity. The new Changshu plant is due to come on stream in early 2016.

Arkema is a leading European supplier of chlorochemicals and PVC. Kynar and Kynar Flex are registered trademarks of Arkema Inc. With operations in close to 50 countries, some 19,000 employees and research centers in North America, France and Asia, Arkema generates pro forma annual revenue of some EUR7.6 billion.
MRC

S.African Sasol may expand U.S. cracker, sell power to Eskom

MOSCOW (MRC) - South African petrochemicals group Sasol could expand its USD8.9 billion cracker project in the U.S. state of Louisiana depending on market conditions, said Reuters, citing the company's chief executive.

Sasol is going ahead with the cracker, which takes ethane, a component of natural gas, and turns it into ethylene, used in the manufacture of plastic products.

The world's biggest maker of motor fuel from coal in January delayed the final investment decision on the gas-to-liquids (GTL) plant at the Louisiana site, which will cost up to USD14 billion, because of the low oil price.

"Because of the volatility in the market, other things may feature. For example, more cracking capacity versus GTL," chief executive David Constable told Reuters on Monday after the company announced interim results. Constable said Sasol could build another cracker and derivatives plant or expand cracking capacity.

"Gas prices are staying very low. We need 16 times that gas price to make a good return on GTL," he said. Sasol said it could sell up to 400 megawatts of excess power that it generates in-house from steam boilers and gas turbines to South Africa's state-run power utility Eskom.

Eskom is scrambling to keep the lights on in Africa's most advanced economy and frequently has to implement controlled power outages to keep the grid from being overwhelmed. "There are options for us to work with Eskom on power purchase agreements," Constable said during a results briefing, which showed a 6 percent rise in first-half earnings after higher sales helped offset the impact of falling oil prices.

Headline earnings per share rose to 32 rand, the middle of the range that Sasol previously flagged to the market. Sasol cut its interim dividend by 12.5 percent, a move it had also previously signalled, to save cash in a volatile environment, though the reduction was not as big as some in the market had anticipated.

Sasol, which declared an interim dividend of 7 rand per share, said its objective was to maintain a 40:60 split between the interim and final dividend. The group has changed its progressive dividend policy to a more fluid payout based on headline earnings.

"They didn't want to make the first reduction to the dividend too aggressive," said Nedbank Capital analyst Mohamed Kharva.

Last month, Sasol said it would delay a decision on a USD14 billion gas-to-liquids facility in Lake Charles, La., due to low oil prices.

Sasol Limited is an integrated energy and chemical company based in Johannesburg, South Africa. It develops and commercialises technologies, including synthetic fuels technologies, and produces different liquid fuels, chemicals and electricity.
MRC

South Korea gives conditional approval for Hanwha acquisition of Samsung General Chemicals

MOSCOW (MRC) -- South Korea's Fair Trade Commission (KFTC) has given conditional approval to Hanwha's proposed acquisition of Samsung General Chemicals, said Chemicals-technology.

The regulatory authority identified that the combined entity could dominate the domestic ethylene vinyl acetate (EVA) market, which could result in higher prices. However, markets of the other three chemical products including low-density polyethylene, linear low-density polyethylene and high-density polyethylene will not be significantly affected by the transaction, KFTC said.

The agency stated that the deal will strengthen the monopolistic nature of the EVA market as the market share of Hanwha Chemical and Samsung Total will be higher and the number of competitors will decrease from four to three.
"The approval requires the company to ensure that the domestic price of EVA is increased at slower rate in domestic market in next three years if export price of EVA rises in overseas market."

The approval requires the company to ensure that the domestic price of EVA is increased at slower rate in domestic market in next three years if export price of EVA rises in overseas market. It should be lower than the rate of export price increase of the production in the past six months.

Hanwha should also see that in case of EVA export price decreases, domestic price should be lowered by the rate of decrease higher than the rate of export price decrease of the past six months period. The remedies imposed should be implemented for the next three years and the report on proceedings should be submitted to the agency semi-annually, KFTC said.

Hanwha Chemical signed a deal to acquire 27.6% and 30% stakes of Samsung Electronics and Samsung Corporation in Samsung General Chemicals in November last year. The company also agreed to buy Samsung Total Petrochemicals joint venture.

According to Korean media reports, around 2,300 union members of Samsung chemical and defence affiliates staged a protest rally in Seoul opposing the sale of the businesses to Hanwha.

As MRC wrote before, Hanwha Chemical is no longer considering buying parts of Dow Chemical's chloro-alkali business. South Korea's Hanwha Chemical had picked Credit Suisse to advise on possible purchases from Dow Chemical's chloro-alkali business but its interest is still in the early stages.

Hanwha Group is one of the largest business conglomerate in South Korea. Founded in 1952 as Korea Explosives Inc., the group has grown into a large multi-profile business conglomerate, with diversified holdings stretching from explosives, their original business, to retail to financial services.

MRC