BASF continues to evaluate natural gas-based investment on the US Gulf Coast

MOSCOW (MRC) -- BASF, the world's petrochemical major, has made progress in its plans to build a world-scale methane-to-propylene complex on the US Gulf Coast, as per the company's press release.

The company has selected Freeport, Texas, as the potential site. It will use Air Liquide’s proprietary Lurgi MegaMethanol and Methanol-to-Propylene (MTP) technologies. BASF has contracted Air Liquide to provide basic engineering services for this gas-to-propylene complex.

The plant is planned to have an annual production capacity of approximately 475,000 metric tons of propylene. This project would be BASF’s largest single-plant investment to date and is subject to final approval in 2016 by the BASF Board of Executive Directors.

The Freeport site was founded in 1958 as the first BASF manufacturing facility outside of Europe. With more than 800 full-time employees, the Freeport site is one of two BASF Verbund sites in North America and uses propylene in its manufacturing processes.

The on-purpose production of propylene to supply the company’s North American operations would allow BASF to take advantage of low gas prices resulting from US shale gas production. The investment would further strengthen BASF’s backward integration into propylene and grow its propylene-based downstream activities, leading to a stronger market position in North America.

As MRC wrote before, in September 2014, BASF announced the start-up of a new butadiene extraction plant at its Verbund site in Antwerp, Belgium. The plant has an annual production capacity of 155,000 metric tons.

Propylene is one of the most important basic chemicals in the petrochemical industry and is used in the production of a wide range of higher-value chemicals. These chemicals are used to manufacture products such as coatings, detergents, and superabsorbent polymers for baby diapers.

BASF is the world’s leading chemical company. Its portfolio ranges from chemicals, plastics, performance products and crop protection products to oil and gas. BASF had sales of over EUR74 billion in 2014 and over 113,000 employees as of the end of the year.
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MOSCOW (MRC) -- EuroChem Group AG shelved a decision to build a USD1.5 billion ammonium plant in the U.S as sanctions limit access to funds and the Russian ruble’s drop makes projects in the fertilizer producer’s home market attractive, said Bloomberg.

"The decision on the project is delayed due to changes on the financial markets, namely affected access to credit resources," Chief Financial Officer Andrey Ilyin said in an interview in Moscow on March 18. "The ruble’s devaluation also made development of such projects more attractive in Russia."

Russia was sanctioned by the U.S. and Europe last year over the conflict in Ukraine, preventing Russia’s largest lenders and some companies from borrowing in the U.S. and European Union. The ruble plunged 46 percent against the dollar last year, cutting mining exporters’ costs.

PAO Severstal sold its U.S. assets for USD2.3 billion last year as the steel industry failed to fully bounce back from the 2009 plunge in demand and the operations’ profit margins were less than half those it gets in Russia. OAO Mechel sold its Bluestone coal unit in the U.S. last month after idling the asset in April 2014 as a demand slump left much of the U.S. coal industry unprofitable.

EuroChem, controlled by Russian billionaire Andrey Melnichenko, said in July 2013 that it planned to build the plant in Louisiana to produce ammonia and urea for the U.S. and for export, creating 200 jobs directly and 1,300 positions in related industries. The company has purchased 2,150 acres (870 hectares) near Carville in Iberville Parish, a site also known as Point Clair Farm, and planned to make the final decision on the plant by the end of 2014.

The company also has a USD1 billion project to build an ammonia plant in Russia’s Leningrad region. As the Russian price of gas, the main raw material for ammonium fertilizers, became cheaper after the ruble’s decline, capital expenditure on similar projects at home is lower, according to Ilyin.

Average gas prices in Russia dropped to as low as USD2.20 per million British thermal units from $4 last year because of the ruble’s devaluation, Ilyin said. EuroChem also produces about 1 billion cubic meters of gas annually in Russia.
Should gas prices in the U.S. rise and if exports of liquefied natural gas are allowed, that will make the Louisiana project less attractive, he said.

The company is building USD7.4 billion of potash projects in Russia. It needs to invest about USD1 billion annually by 2018, when its two mines will start up, while it needs as much as USD800 million to refinance debt due this year, Ilyin said.

The ruble’s plunge will help to fulfill EuroChem’s demand for cash, according to the CFO. The company’s cash-flow this year will be USD500 million higher than in 2014 due to ruble weakness, he said.

EuroChem Group AG, an agrochemical company, primarily produces and sells mineral fertilizers worldwide. It operates through four segments: Nitrogen, Phosphates, Potash, and Distribution.
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MOSCOW (MRC) -- Total has acquired a majority 68% interest in Germany's Polyblend. Polyblend produces compounds, which are blends of polymers (polyethylene and polypropylene) and other ingredients such as mineral fillers, glass fibres, elastomers and additives, formulated to customer specifications, said Energyglobal.

The transaction is aligned with the Group's strategy of developing higher value added polymers and differentiating itself in markets away from commodity plastics.

Total recently began building two polypropylene compounding lines at the Carling Platform as part of its project to secure the French site's future. The lines are scheduled to start up in mid 2016.

"The acquisition allows Total to consolidate its position in the fast growing market for polymers for automotive solutions," explained Philippe Sauquet, President of Total’s Refining & Chemicals. "Accentuated efforts to lighten vehicles to improve their efficiency mean that this type of product, whose technology is constantly evolving, enjoys a strong growth outlook. The Polyblend acquisition complements the current investment in new production lines at the Carling site. We will be able to tap expertise and synergies at the main facility in Carling and the Polyblend site in Bad Sobernheim, just 150 km away, to productively expand in this field."

As MRC informed earlier, Total, Europe’s third-largest oil company, 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.

MRC

MOSCOW (MRC) -- INVISTA Performance Technologies (IPT) and Hengli Petrochemical are delighted to announce the successful start-up of Hengli’s third PTA line utilizing INVISTA’s PTA process technology, said Reuters.

"The 2.2 million-tonne PTA production line is starting up quickly, with one of our streams reaching 100 percent utilization within 24 hours," said Mike Lin, Hengli vice general manager, said. "The smooth start-up is not surprising, however; our other two PTA lines onsite continue to operate in excess of 100 percent flow sheet rate."

Mike Pickens, IPT President, commented, “The successful PTA plant start-up represents the latest milestone in our relationship with Hengli. We continue to be impressed by excellent project execution and operational capability displayed by the Hengli team, achieving what we feel is a market-leading, competitive position.

"We are very appreciative of the trust that Mr. Chen Jianhua and his team have placed in INVISTA, recognizing that good plant performance is critical for our client’s return on investment."

This successful PTA plant start-up continues INVISTA’s reputation for PTA plants that start-up reliably and reach flow sheet rates quickly.

As MRC wrote before, INVISTA and LanzaTech signed a research and development agreement focused on the development of gas-fermentation process technology for the production of industrial chemicals from carbon dioxide and hydrogen gas (CO2 and H2) feedstocks.

INVISTA is one of the world’s largest integrated producers of chemical intermediates, polymers and fibers. The company’s advantaged technologies for nylon, spandex and polyester are used to produce clothing, carpet, car parts and countless other everyday products. Headquartered in the United States, INVISTA operates in more than 20 countries and has about 10,000 employees.

MRC

MOSCOW (MRC) - Despite a number of negative factors, in January - February of this year, imports of suspension polyvinyl chloride (SPVC) in Ukraine increased to 14,300 tonnes, up 30% compared to the same period of 2014, as per MRC DataScope.

February SPVC imports to Ukraine dropped to 6,200 tonnes, compared with 8,100 tonnes in January 2015. Nevertheless, in spite of the time factor (long holidays in January) and a severe recession in the economy, the Ukrainian companies in the current year continued to buy quite high SPVC purchases in foreign markets.

Ukraine's SPVC imports over the first two months of the year exceeded 14,300 tonnes, compared with 11,000 tonnes year on year.
The main increase in SPVC imports occurred for supplies from Europe.

Structure of PVC imports in Ukraine over the reported period was as follows. February imports of US PVC slightly decreased to 3,200 tonnes, compared to 3,400 tonnes a month earlier. Total imports of US resin into the country dropped to 6,600 tonnes in January-February 2015, compared with 7,100 tonnes year on year.

February imports of European PVC in Ukraine decreased to 1,600 tonnes, compared with 3,600 tonnes in January. Total imports of European SPVC were 5,300 tonnes in the first two months of the year, compared with 3,800 tonnes year on year.

Ukraine's imports of Russian PVC have significantly increased over the recent months. February imports of Russian PVC into the country exceeded 1,400 tonnes (953 tonnes in January). Total Russian PVC imports in Ukraine reached 2,400 tonnes in the first two months of the year, compared with 40 tonnes year on year.


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