Axiall Corp and Lotte Chemical ink JV on ethane cracker

MOSCOW (MRC) -- US based Axiall Corporation and South Korean Lotte Chemical Corporation have finalised a joint venture (JV) agreement to construct an ethane cracker, said Fibre2fashion.

The final investment decision remains subject to approval by both companies’ boards of directors. The companies have formed LACC LLC to design, build and operate an ethane cracker in Louisiana that would produce approximately one million metric tons of ethylene annually once it commenced operation.

Since announcing their intent to partner on the project in February 2014, Axiall and Lotte have also completed a joint FEED study for the plant. The two are now evaluating final project details, including site selection, which is anticipated in Lake Charles, La. A final investment decision is anticipated in the second half of 2015. If approved, the plant’s anticipated start-up would be the end of 2018.

If approved by Lotte’s Board of Directors, Lotte Chemical also plans to build a monoethylene glycol (MEG) plant adjacent to the proposed cracker. Axiall would not have any investment in or ownership of that MEG plant. Lotte Chemical currently operates three crackers in Asia that produce more than 2.8 million metric tons of ethylene capacity annually.

Financial terms of the joint venture call for Lotte to lead the project with Axiall having a maximum capital contribution obligation of USD225 million towards the cracker during the engineering, procurement and construction phases of the project. The amount of Axiall’s capital contribution relative to the total, actual cost of constructing the cracker would determine the amount of ownership Axiall holds in the cracker. Axiall will retain an option to increase its ownership level to up to 50 percent of the completed plant.

"Investing for the long-term benefit of both of our companies, today’s announcement continues Axiall’s integration strategy. If approved, the project meets our strategic objective of providing 50 percent of our future ethylene needs at advantaged cost," said Paul Carrico, Axiall president and chief executive officer.

"We are pleased to affirm our partnership with Axiall to develop a world-scale ethane cracker fed by U.S. shale gas," said Soo Young Huh, Lotte Chemical president and chief executive officer. "This investment will build on Lotte Chemical’s global ethylene construction and operating capabilities and increase our manufacturing presence in the North American market."

Axiall Corporation is a leading integrated chemicals and building products company. Headquartered in Atlanta, Axiall has manufacturing facilities located throughout North America and in Asia to provide industry-leading materials and services to customers.

Lotte Chemical is a member of the Lotte Group in Korea, which has been listed on the Korean Stock Exchange since 1991. Lotte Chemical is a leading manufacturer of petrochemical products, such as ethylene, propylene, butadiene, polyethylene, polypropylene, ethylene oxide/glycol, compound resin, polyethylene terephthalate, polycarbonate, methyl methacrylate, ethylene oxide derivatives, benzene, toluene, mixed xylene, purified terephthalic acid and purified isophthalic acid among others. Lotte Chemical, headquartered in Seoul, South Korea, has manufacturing facilities located throughout South Korea, China, Malaysia, Indonesia, Pakistan, UK and the USA.
MRC

Moodys sees Russian sanctions entrenched in blow to rating

MOSCOW (MRC) -- Russia will have to contend with sanctions "for the foreseeable future" as the continuing conflict in Ukraine hinders its prospects for regaining an investment grade rating, reported Bloomberg with reference to Moody’s Investors Service.

Moody’s, which in February joined Standard & Poor’s in cutting the country’s debt to junk, is "highly unlikely" to raise Russia to investment grade within the next 12 to 18 months, Kristin Lindow, senior vice president at the rating company, said in an interview on Friday in London. Moody’s rates the country Ba1, the highest speculative level, with a negative outlook.

European Union governments on Monday prolonged sanctions against Russia by six months to the end of January as sporadic fighting intensified between Ukrainian troops and pro-Russian separatists, further rattling a truce negotiated last February in Minsk, Belarus. The curbs on trade and investment have helped push the Russian economy toward its first recession since 2009.

"As long as the sanctions are in place and most of the issuers in the economy have a difficult time refinancing their external debt, it’s unlikely that we would move the rating back to investment grade," Lindow said.

As MRC wrote before, in January 2015, Moody's downgraded ratings of 8 non-financial corporations, including Rosneft, Gazprom Neft, Lukoil, Russian Railways. Moody's Investors Service downgraded the ratings of Rosneft, Gazprom Neft and 6 other non-financial corporations and their subsidiaries after downgrading Russia's sovereign rating.

In particular, Moody's downgraded to Baa3 from Baa2 the ratings of the following companies: Rosneft and its subsidiaries Rosneft Finance SA, Rosneft International Finance Limited and Rosneft International Holdings Limited; Gazprom Neft and its subsidiary GPN Capital S.A., the Federal Passenger Company, Lukoil and its subsidiary LUKOIL International Finance, MMC Norilsk Nickel and its subsidiary MMC Finance Ltd., Russian Railways and its subsidiary RZD Capital Plc. All these ratings have been placed under review for further possible downgrade.

The rating action followed Moody's decision to downgrade Russia's sovereign ratings to Baa3 from Baa2 on January 16, 2015.
MRC

Petronas taps Axens technology on RAPID refining expansion in Malaysia

MOSCOW (MRC) -- Malaysia's national oil and gas company Petronas has selected Axens as a technology provider for its refinery and petrochemicals integrated development (RAPID) project in Pengerang, Johor, reported Hydrocarbonprocessing.

RAPID is part of Petronas' Pengerang Integrated Complex (PIC) development, which includes six major associated facilities. Those are the Pengerang co-generation plant, re-gasification terminal 2, an air separation unit, the raw water supply project, the liquid bulk terminal as well as central and shared utilities and facilities.

Developed within a 6,242-acre site in Pengerang, Johor, PIC forms part of the Johor State’s Pengerang Integrated Petroleum Complex (PIPC), which is under Malaysia’s Economic Transformation Program (ETP) to establish new engines of growth for Malaysia; whilst meeting future energy requirements and strengthening Petronas’ position as a key player in the Asian chemicals market, focusing on differentiated and specialty chemicals.

RAPID is estimated to cost USD16 billion, while the associated facilities will involve an investment of about USD11 billion. PIC is poised for its refinery start-up by early 2019.

Axens was initially selected in October 2010 for a detailed feasibility study, after which their technologies were selected following an open bid in January 2012 on the basis of the best NPV (net present value), as well as proven long-term operating experiences supported by the technology and catalyst’s specific features; hence providing additional benefits to the project.

As MRC reported earlier, in February 2015, Muhibbah Engineering (M) Bhd ( Financial Dashboard) clinched a USD32 million (RM116 million) construction subcontract for the Petroliam Nasional Bhd's (Petronas) Refinery and Petrochemicals Integrated Development (Rapid) project in Pengerang, Johor.

Petronas, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company wholly owned by the Government of Malaysia. The Group is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining; marketing and distribution of petroleum products; trading; gas processing and liquefaction; gas transmission pipeline network operations; marketing of liquefied natural gas; petrochemical manufacturing and marketing; shipping; automotive engineering; and property investment.
MRC

Total to sell German refinery stake to Rosneft

MOSCOW (MRC) -- Total has signed an agreement to sell its 16.67% interest in the Schwedt refinery in northeastern Germany (Brandenburg) to Rosneft, which already holds indirectly an 18.75% stake in the facility, the companies announced on Friday.

The transaction is valued at $300 million, excluding working capital and remains subject to customary approvals.

"The sale of our minority interest in the Schwedt Refinery is in line with our 2017 target to reduce Total’s European refining and petrochemical capacity by 20%, as announced in 2012," said Philippe Sauquet, president of Total Refining & Chemicals.

"Monetizing this non-core asset also contributes to the group’s accelerated disposal program in 2015 and demonstrates Total’s commitment to actively manage its portfolio across all segments," he added.

Located in northeastern Germany, the Schwedt Refinery has a capacity of 12 MMtpy. The refinery is owned by Shell (37.5%) and indirectly by Rosneft (18.75%), BP (18.75%), Total (16.67%) and ENI (8.33%).

As MRC informed earlier, Rosneft and BP signed several agreements strengthening the long term strategic relationship between the two companies, at the St. Petersburg International Economic Forum.

Rosneft became Russia's largest publicly traded oil company in March 2013 after the USD55 billion takeover of TNK-BP, which was Russia’s third-largest oil producer at the time.
MRC

Bayer MaterialScience and Geba Kunststoffcompunds developed carbon fibre-reinforced TPU

MOSCOW (MRC) -- Geba Kunststoffcompounds GmbH and Bayer Material­Science AG have jointly ­developed Desmovit DP R CF, a range of ester-based, carbon fibre-reinforced thermoplastic polyurethanes, as per GV.

The TPU is exclusively produced and sold by Geba.

The new material is said to have many of the positive properties of unfilled TPU: It offers high abrasion resistance and is also resistant against various oils and fats, hot air and ­hydrolysis.

Desmovit DP R CF is suitable, e. g., for the production of protectors as well as protective cases for tablets and smartphones. The material prevents penetration by sharp objects, absorbs impact force and reduces the remaining energy. In addition, it can be used, e. g., in sports equipment and in durable housings for various fields of application, such as in watches, tools, and bino­culars.

Furthermore, the material becomes antistatic with a certain level of carbon-fibre reinforcement, which offers advantages for use in rollers, wheels and housings where electrostatic charges are to be avoided. Due to the material’s heat and cold stability it is also suitable for use in various outdoor applications, says the manufacturer.

As MRC wrote previously, following a successful test phase and promising market analysis, Bayer MaterialScience (BMS) plans to invest EUR 15 million in the construction of a production line at its Dormagen site, which will use CO2 to produce a precursor for premium polyurethane foam. The line will have an annual production capacity of 5,000 metric tons. The greenhouse gas carbon dioxide can be used as a basic building block for plastics. The objective of the “Dream Production” project is to launch the first CO2-based polyols on the market starting in 2016. Processors of polyols and polyurethanes have already expressed considerable interest.

Bayer MaterialScience is among the world’s largest polymer companies. Business activities are focused on the manufacture of high-tech polymer materials and the development of innovative solutions for products used in many areas of daily life. The main segments served are the automotive, electrical and electronics, construction and the sports and leisure industries. At the end of 2013, Bayer MaterialScience had 30 production sites and employed approximately 14,300 people around the globe. Bayer MaterialScience is a Bayer Group company.
MRC