Solvay expands R&I center to internationalize its oil & gas business

MOSCOW (MRC) -- Solvay has inaugurated a newly expanded Oil & Gas lab in its world-class Singapore Research & Innovation Centre, reported the producer on its site.

The dedicated lab space, team and resources will enable Solvay’s Novecare global business unit to internationalize its oil & gas business to serve its regional customers looking to develop in the segments of production, cementing and stimulation, especially in fast growing countries such as China, Malaysia and Australia, among others.

The new lab showcases state-of-the art equipment and will focus on leading innovation and product development projects for customers in Asia Pacific. It will provide comprehensive solutions for cementing, stimulation and production applications, together with a dedicated team working on Enhanced Oil Recovery (EOR) Solutions. This is done in collaboration with Solvay’s global teams and strategic partners.

Employing its successful specialty formulation model, Solvay can now quickly develop and produce tailor-made chemicals and solutions to fit the unique geological conditions of local shale formations.

"We want to be close to our customers and continue the momentum to internationalize our oil and gas portfolio and formulated solutions. With high regional demand for oilfield chemicals, this expansion provides our customers close proximity to a partner with comprehensive solutions and custom formulations," explained Emmanuel Butstraen, Solvay Novecare President.

The lab expansion coincides with Solvay’s announcement of the inauguration of its alkoxylation plant in Singapore, the largest facility of its kind in Asia. The "on-pipe" investment will help meet that demand, complementing existing India and China facilities and joining Solvay Novecare’s seven other alkoxylation plants in Europe and North America. Located in the world-class integrated petrochemical hub of Jurong Island, the plant receives a key raw material, ethylene oxide via a dedicated pipeline, and fatty oleochemicals from nearby countries, providing a safe and sustainable source of supply for the near and long term.

As MRC informed earlier, in early July 2015, Solvay and Ineos announced the start-up of their Joint Venture INOVYN, a world-class competitive player in chlorovinyls, following European Commission approval. The finalized terms of the Joint Venture agreement remain materially unchanged from those announced in June last year. Solvay received upon closing an upfront cash payment of EUR150 million - subject to customary adjustments such as actual working capital levels. In addition to contributing their entire European chlorovinyl business, Solvay has transferred liabilities estimated at EUR260 million into the Joint Venture. In three years’ time, Solvay will exit INOVYN and receive an additional, performance-based payment targeted to be EUR280 million, with a minimum of EUR95 million. Thereafter, INEOS will be the sole owner of the business.

Solvay S.A. is a Belgian chemical company founded in 1863, with its head office in Neder-Over-Heembeek, Brussels, Belgium. The company has diversified into two major sectors of activity: chemicals and plastics. Solvay supplies over 1500 products across 35 brands of high-performance polymers – fluoropolymers, fluoroelastomers, fluorinated fluids, semi-aromatic polyamides, sulfone polymers, aromatic ultra polymers, high-barrier polymers and cross-linked high-performance compounds.
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Shell says BG deal will produce billions in savings

MOSCOW (MRC) -- Royal Dutch Shell expects billions of dollars more in savings from its proposed ?55bn takeover of BG Group than previously disclosed as it uses the enlarged company’s scale to slash costs in its deepwater oil business and natural gas trading arm, said Financial Times.

Stung by a slide in Shell’s share price, which has tumbled 13 per cent since the BG deal was announced in early April, chief financial officer Simon Henry has sought to turn round investor scepticism over the economics of the deal.

The Anglo-Dutch energy company has told investors and analysts that so-called "value synergies" — benefits that cannot yet be quantified under City takeover rules — are likely to be “a multiple” of the USD1bn in annual projected savings from merging head offices and other cost-cutting.

Ben van Beurden, Shell’s chief executive, is also likely to use the company’s interim results on July 30 to outline a substantial cut to this year’s capital investment, as it adjusts to a 50 per cent plunge in oil prices since last summer.
Few in the City have questioned the deal’s logic, which gives Shell huge deepwater Brazilian reserves and cements its position as the world’s biggest supplier of liquefied natural gas after Qatar.

But concerns have grown that Shell needs oil prices of USD90 a barrel for the deal to work, its projected savings are too low and new LNG supplies will send Asian prices even lower.

Shell’s shares have in the past year underperformed those of a group of “supermajors” including BP, whose share price rose after it announced steep spending cuts. This year’s capital spending budget at Shell is expected to be revised lower, by several billion dollars from the USD33bn announced at the end of April, reflecting project deferrals.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.

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Mitsui & SK launch polyurethanes JV

MOSCOW (MRC) -- Mitsui Chemicals and SKC, a subsidiary of SK Holdings Co. Ltd, have started operations of their new equally-owned Mitsui Chemicals & SKC Polyurethanes Inc. joint venture, reported GV.

The new company, headquartered in Seoul, South Korea, and having operations in both South Korea and Japan, has the capacity to produce a total of 720,000 t/y of toluene diisocyanate, diphenylmethane diisocyanate and polyols.

As MRC wrote previously, in late May 2015, The European Commission (EC) approved, under the European Union Merger Regulation, the proposed polyurethanes materials joint venture between Mitsui Chemicals Inc. and SKC.

Mitsui Chemicals is a leading manufacturer and supplier of value added specialty chemicals, plastics and materials for the automotive, healthcare, packaging, agricultural, building, and semiconductor and electronics markets. Mitsui Chemicals is a Japanese Chemicals company, a part of the Mitsui conglomerate. The company has a turnover of around USD15 billion and has business interests in Japan, Europe, China, Southeast Asia and the USA. The company mainly deals in performance materials, petro and basic chemicals and functional polymeric materials.
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SGL agrees to sell composite sbusiness to Avcorp Industries

MOSCOW (MRC) -- Germany’s SGL Group concluded an agreement with Toronto-listed Avcorp Industries Inc. (Canada) on the sale of our subsidiary HITCO’s (HITCO Carbon Composites, Inc., USA) business of manufacturing composite structural parts for commercial and military aerostructures, said the producer in its press release.

This includes all inventories, equipment, tooling and other fixed assets, intellectual property, contractual rights, good will, accounts receivable, and work in progress; Hitco’s materials division is not part of this transaction.

The terms of the agreement result in overall negative proceeds of USD 47 million, which consists of payments to Avcorp, repayments of customer advance payments as well as costs relating to various services to the benefit of the buyer. The purchase consideration is subject to customary adjustments based on working capital of Hitco and certain contract pricing adjustments.

This leads to an impairment charge in the range of EUR 50-55 million on the HITCO assets held for sale recorded under discontinued operations in the income statement. The related cash outflow amounts to approx. EUR 40 million, of which the larger part will be payable on closing. The cash outflow related to the sale of the commercial business of HITCO was not included in the Company’s free cash flow guidance from continued operations and will be recorded in the free cash flow from discontinued operations.

The transaction is subject to customary closing conditions, including approval by the relevant US authorities (Committee on Foreign Investment in the United States (CFIUS), International Traffic in Arms Regulations (ITAR)), the conclusion of ancillary agreements and non-occurrence of a material adverse change until closing, and is expected to be closed at the latest by October 16, 2015.

As MRC informed earlier, SGL and the chemical company BASF have concluded the joint research of a new composite material system as an important development step of their collaboration.

SGL Group is one of the world’s leading manufacturers of carbon-based products and materials. It has a comprehensive portfolio ranging from carbon and graphite products to carbon fibers and composites.

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VolkerWessels seeks partners to pilot its plastic road concept

MOSCOW (MRC) -- Construction major VolkerWessels is looking for partners to take ahead its idea of PlasticRoad, roads made of 100% recycled material, said Packagingmaterials.

The company has said that the idea is still on paper, but plans to materialize it in three years. PlasticRoad is made by turning recycled plastic into prefabricated road parts. Prefabrication and lightweight design make the construction easier, with lesser time taken than the conventional roads.

VolkerWessels said in a release: "PlasticRoad features numerous advantages compared to conventional roads, both in terms of construction and maintenance.

"Plastic is much more sustainable and opens the door for a number of new innovations such as power generation, quiet road surfaces, heated roads and modular construction."

Claimed to be unaffected by corrosion and weather, the road structure can withstand temperatures between -40 degree and 80 degree Celsius. Suitable to be laid on sand surface, the roads are estimated to have a tripled life span and lower maintenance.

The hollow space underneath the road provides room for cables, pipes and draining rainwater. There are also options for accommodating equipment, such as, traffic loops sensors, measuring equipment, and connections for light poles underneath the road surface.

VolkerWessels is seeking partners from the plastic manufacturing industry, as well as from interested parties to collaborate on a pilot. The pilot will test PlasticRoad's safety under wet and slippery conditions.

Rotterdam city in the Netherlands is planning to pilot the project, reported The Guardian.

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