PTT Global Chemical looks for import more feedstock after declines in global oil prices

MOSCOW (MRC) -- Thailand's PTT Global Chemical PCL is studying several options for supplying sufficient raw material to its petrochemical plants, including imports of oil feedstocks after declines in global crude prices, as per Reuters.

The move is part of a plan to cope with a potential drop in domestic natural gas supply after Thailand's government put bidding for new oil and gas concessions on hold, chief executive Supattanapong Punmeechaow told reporters.

"Natural gas in the Gulf of Thailand is likely to be depleted over the next 7-8 years. We have to consider several options including using raw material from our refinery, importing more feedstock and shale gas," Supattanapong said.
PTT Global, petrochemical flagship of Thailand's top energy firm PTT PCL, will use more naphtha from its oil refinery to feed its olefins crackers which make products such as ethylene and propylene. PTT Global, one of the world's top 10 ethylene makers, has petrochemical capacity of 8.75 mln tpa and runs a refinery with a crude and condensate refining capacity of 280,000 bpd.

As MRC wrote previously, in 2013, Indonesian state-owned energy company Pertamina signed an agreement to purchase petrochemical products from Thailand’s PTT Global Chemical. The agreement serves as a pre-marketing strategy for Pertamina and PTT’s joint Indonesian petrochemical business. Under the agreement, PTT will deliver at least 5,000 tonnes of polyethylene (PE) and polypropylene (PP) products each month to Pertamina for sale in Indonesia.

Last year, Pertamina and PTTGC announced that they would start joint shipments of PE to the Indonesian market from 1 July 2014, but they were posponed till September.

PTT Global Chemical is a leading player in the petrochemical industry and owns several petrochemical facilities with a combined capacity of 8.45 million tonnes a year.
MRC

MOSCOW (MRC) -- Total, Europe’s third-largest oil company, has developed new high density polyethylene (HDPE) pipe grade, as per the company's press release.

Total's latest pipe grade HDPE - XSene XRT70 - combines excellent processability with elevated temperature performance and long-term stability to raise processing performance to a level never seen before. XSene XRT70 incorporates the best of Total’s expertise in materials for gas and water pressure pipe, accumulated over more than 30 years serving the gas and water pressure pipes industry.

XSene XRT70 is a PE-RT (PE with Raised Temperature resistance) Type II HDPE produced using Total’s Advanced Double Loop technology. High extrusion speeds can be reached at low extrusion temperatures and without any melt fracture, while keeping an excellent surface finish.

Recent industrial production runs at key customers producing multilayer composite pipes (MLCP) have clearly demonstrated the productivity gains made possible by this resin. These pipes have inner and outer layers of PE-RT that encase a core layer of aluminium foil.

In Poland, established hot & cold pipe system manufacturer Sigma-Li has used XSene XRT70 to achieve a stable pipe production at high line speeds of 40 m/min for 16-mm diameter HDPE-aluminium composite pipes for central heating systems. They were produced on a battenfeld-cincinnati uniEX 45-30 line that the company recently installed, one of the most advanced in Europe. In China, the same high line speed was achieved with the same material for a 20 mm diameter PE-RT pipe.

As MRC wrote before, 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 plans indeed to develop new activities on the platform in the growing markets for hydrocarbon resins (Cray Valley) and for polymers, while shutting down the acutely loss-making steam cracker in the second half of 2015.

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) -- Petrochemicals Company Sasol reported a 6% rise in first-half earnings after higher sales and chemical prices helped offset the impact of falling oil prices, said Customstoday.

The company said headline earnings per share rose to R32, the middle of the range it flagged to the market. Sasol also cuts its interim dividend by 12.5%, a move it had previously signalled, to save cash in a volatile environment.
Sasol, the world’s top maker of motor fuel from coal, said it had changed its progressive dividend policy to a more fluid payout based on headline earnings. It declared an interim dividend of R7 per share.

"They didn’t want to make the first reduction to the dividend too aggressive because they wanted to give the market a bit more confidence," said Nedbank Capital analyst Mohamed Kharva.

Sasol shares rose 1% to R400 on Monday but they have lost about 36% of their value from all-time highs in June 2014. The company said it expected various initiatives to result in savings of R4bn (USD332m) "by financial year 2016 off a 2013 cost base".

Sasol, which makes about 40% of its earnings from oil, said it expects the average Brent crude oil price to be at least 30% lower in the second half of its financial year compared to the first. Brent crude fell 19% in the reporting period.

The weakness of the rand boosted profit as the company pays its costs in rands while selling its products in dollars.
Brent crude oil, in oversupply, fell to USD59 a barrel on Monday. But it rose by almost a third between January and February on the back of Middle East supply disruptions, strong winter demand and high refinery margins.

As MRC informed before, KBR was awarded a contract from INEOS and Sasol to provide engineering, procurement, and construction (EPC) services for a new high-density polyethylene (HDPE) facility to be located at INEOS's Battleground complex in La Porte, Texas.

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

MOSCOW (MRC) - Production of high density polyethylene (HDPE) in Russia decreased to 143,000 tonne in January-February 2015, down 28% year on year. The decrease in HDPE production resulted from a long time shutdown of Stavrolen, according to MRC ScanPlast.

February HDPE production in the country fell to 70,000 tonnes, compared to 73,000 tonnes a month earlier, because of the calendar factor.
Russian producers this year have increased the level of capacity utilisation, however, this factor can not compensate for the long time shutdown of the second largest HDPE producer in Russia - Stavrolen. Structure of HDPE production over the reported period looked as follows.

Russia's largest producer of polyethylene - Kazanorgsintez increased its capacity utilisation in February, having produced 45,200 tonnes of HDPE in February 2015, compared with 44,800 tonnes in January. The producer's HDPE production over two months exceeded 90,000 tonnes, compared with 85,100 tonnes in the same period of 2014.

Nizhnekamskneftehim last month produced 17,200 tonnes HDPE, compared with 18,800 tonnes a month earlier. Total HDPE production over two the first two months of the year at the plant was about 36,000 tonnes, compared with 33,700 tonnes year on year.
"Gazprom neftekhim Salavat" in February had to shut its HDPE production on technical problems; last month's HDPE productin at the plant decreased to 7,600 tonnes, compared with 9,400 tonnes in January. The producer's HDPE production over the first two months of the year was 17,000 tonnes, which is close to the output in the same time a year earlier.

As it was written earlier, Stavrolen because of the accident in the workshop production of ethylene on 26, February, had to suspend production of polyethylene. According to unofficial information, the company plans to resume production of HDPE in April of this year.
Its annual production capacity is 300,000 tonnes.
MRC

MOSCOW (MRC) -- Royal DSM, the Life Sciences and Materials Sciences company, and CVC Capital Partners (CVC), one of the world’s leading investment advisory firms, has announced a partnership for DSM’s activities in Polymer Intermediates (caprolactam and acrylonitrile) and Composite Resins through the formation of a new company, provisionally called NewCo, reported DSM on its site.

Feike Sijbesma, Chief Executive Officer and Chairman of the Managing Board of Royal DSM said: "This proposed transaction delivers on the strategic actions DSM announced for these businesses in November 2014 and is a decisive step in further optimizing our portfolio and reducing our cyclicality. We have found a good partner in CVC after a careful process in which we evaluated all options. We believe the partnership with CVC is the best way forward for these businesses. NewCo will operate as an independent, dedicated company under the leadership of CVC. DSM can now focus fully on improving the operational performance of its Nutrition and Performance Materials businesses as well as benefitting from the future value creation in this new venture. This transaction is geared towards value creation for these businesses and is consistent with our commitment to continue to generate value for our stakeholders and deliver on our strategy."

For DSM, this proposed transaction is a logical step in the execution of its strategy as Polymer Intermediates (caprolactam, acrylonitrile) and Composite Resins no longer fit with its more resilient portfolio in Nutrition and Performance Materials. The partnership with CVC allows DSM to further reduce the cyclicality of its portfolio, secure a long-term competitive supply position of caprolactam for DSM Engineering Plastics and fully focus on the Nutrition, Performance Materials and Innovation activities complemented by accelerated actions to improve efficiencies and reduce costs.

As a 35% shareholder in NewCo, DSM will be able to benefit from any improvements in the businesses that will become part of NewCo.

NewCo will continue to supply at least 80% of DSM Engineering Plastics’ caprolactam needs in Europe and North America for the coming 15 years via a drawing rights contract, effectively maintaining DSM Engineering Plastics’ backward integration. In China DSM Engineering Plastics will continue to be supplied by NewCo as today. This secures an ongoing strategic and competitive position for the polyamide 6 business in which DSM is a global leader.

NewCo will operate as an independent company with three business units: caprolactam, acrylonitrile and composite resins. Pro-forma third party sales of NewCo amounted to EUR2.1 billion in 2014 with an EBITDA of EUR106 million, excluding non-controlling interests (DNCC, JDR and Sitech) of €19 million and including the caprolactam licensing income.

As MRC reported earlier, in October 2014, Royal DSM signed a partnership agreement with long fibre thermoplastic (LFT) specialist Plasticomp (Winona, Minnesota / USA) to develop bio-based LFT composite materials based on DSM’s "EcoPaXX" polyamide 4.10.

CVC Capital Partners (CVC) is one of the world's leading private equity and investment advisory firms. Founded in 1981, CVC today has a network of over 20 offices and over 300 employees throughout Europe, Asia and the US. Currently, CVC manages funds on behalf of over 300 investors from North America, Europe, Asia and the Middle East, who entrust their capital to CVC for periods of 10 years or more.

Royal DSM is a global science-based company active in health, nutrition and materials. DSM delivers innovative solutions that nourish, protect and improve performance in global markets such as food and dietary supplements, personal care, feed, pharmaceuticals, medical devices, automotive, paints, electrical and electronics, life protection, alternative energy and bio-based materials.
MRC