Lotte Chemical completes gas plant in Uzbekistan

MOSCOW (MRC) -- Lotte Chemical Corp., the petrochemical unit of South Korea’s No. 5 conglomerate Lotte Group, said Thursday it has completed the construction of a gas chemical complex in Uzbekistan, a major overseas project it has pursued as part of an effort to diversify profit sources, said Koreaobserver.

The joint development project, dubbed "the Surgil Project," was clinched in 2007 between a Korean consortium led by Lotte Chemical and the state-owned oil and gas company Uzbekneftegaz in a 50-50 ownership to build a nearly 100-hectare production line for high-density polyethylene (HDPE), polypropylene (PP) and gas development.

South Korea’s state-run Korea Gas Corp. and local power plant firm GS E&R Corp. also took part in the consortium.

The new facility has been conducting test-runs and will begin its production in January, Lotte Chemical said.

"We were able to push the project forward with the help of both governments. We’ll strive to take a big leap as a global petrochemical firm with the success in the Uzbek project," Huh Soo-young, chief executive of Lotte Chemical, said at a press briefing.

Lotte Chemical has pushed for overseas expansion of its petrochemical facilities in Central Asia in recent years, as part of a bid to secure profit sources at reduced costs.

It hopes the Surgil Project will lead the firm to tap deeper into Europe, Russia and North Africa, the company added.

As MRC informed earlier, in June, Lotte Chemical said it finalized a 3 trillion-won (USD2.64 billion) joint venture agreement with U.S.-based Axiall Corp. to set up a shale gas-based ethane cracker plan in the U.S.

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

MOSCOW (MRC) -- The Odisha government will set up a committee to lay down a roadmap for a downstream petrochemical complex and review of fiscal incentives for the 15 mln tons oil refinery project at Paradip, as per Plastemart.

This was decided at a meeting chaired by chief secretary G.C. Pati on Tuesday with Indian Oil Corporation Ltd. (IOCL) chairman B. Ashok and other state government officials.

The meeting decided to constitute a working group of senior officials of the state government and Indian Oil Corporation Limited (IOCL) to lay down a roadmap for the petrochemical complex and the role of IOCL as an anchor tenant for petroleum, chemicals and petrochemicals investment region, said an official release. The committee would also review the fiscal incentives under a fresh memorandum of understanding (MoU) to be signed for Paradip refinery project, said the release. The refinery is expected to be commissioned by December.

As MRC reported earlier, Indian Oil Corporation's Rs 34,555-crore 15 million tonnes per annum Paradip Refinery has been commissioned in phases from March 2015 onwards, said chairman B Ashok. The refinery is capable for processing a broad basket of crude oil grades, including cheaper high-sulphur heavy crudes, which will help the company to improve bottomline.

Indian Oil Corporation Limited, or IndianOil, is an Indian state-owned oil and gas corporation with its headquarters in New Delhi, India.
MRC

MOSCOW (MRC) -- Formosa Plastics Group, a petrochemical subsidiary of Formosa Petrochemical, has rejected an allegation that its naphtha cracker in Yunlin County’s Mailiao Township was behind a recent surge of PM2.5 pollutants in central Taiwan, laying the blame on wind and the burning of agricultural waste, as per GV.

Levels of PM2.5 - airborne pollutants measuring less than 2.5 micrometers - in Nantou County, Taichung and Yunlin in late-Sept 2015 reached "red levels," at which point there is a greater risk of health problems for sensitive groups - those with chronic respiratory or cardiovascular diseases and senior citizens.

A report by the Chinese-language Liberty Times (the sister newspaper of the Taipei Times) quoted EPA Department of Environmental Monitoring and Information Management Director-General Tsai Hung-te as saying: "The elevated PM2.5 levels in central Taiwan were caused by emissions from the Mailiao naphtha cracker and fugitive emissions from the Jhuoshuei River, as well as poor atmospheric diffusion in the area."

Formosa Plastics said in a statement that the burning of harvest season agricultural waste in Yunlin’s Lunbei and Siluo townships, coupled with low wind speeds and inconsistent wind direction due to the transition between seasons, resulted in the buildup of pollutants and hazy conditions.

Formosa Plastics said that the facility’s emissions of particulate matter, sulfur dioxide and volatile organic compounds were consistent with environmental standards, and that there has been no significant change in the volume of the plant’s emissions, despite the dramatic increase in the PM2.5 readings at the Lunbei station.

As MRC wrote before, Formosa Plastics is in plans to shut a vinyl chloride monomer (VCM) plant in Taiwan for a maintenance turnaround. The plant will be taken offstream in end October 2015. The shutdown will remain in force for around 20-25 days. Located in Jenwu, Taiwan, the VCM plant has a production capacity of 540,000 mt/year.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company's plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC

MOSCOW (MRC) -- Mitsui Chemicals Group, in its newly released annual report, said it has decided to "bring forward" the closure of its Kashima Works in Japan and the shutdown of the diphenylmethane diisocyanate (MDI) plant in Omuta, Japan, to May 2016 from the originally scheduled 31 Dec. 2016 date, according to Apic-online.

Closure of the Kashima site involves the shut down of all plants there. This includes the production of 117,000 t/y of toluene diisocyanate, 32,000 t/y of maleic anhydride, 15,000 t/y of fumaric acid, 1,500 t/y of specialty isocyanates and 900 t/y of hexamethylene diisocyanate. Mitsui's production of specialty isocyanates at Kashima will be shifted to Omuta following the shutdown.

At the same time, Mitsui will close its 60,000-t/y MDI plant at the Omuta site and dispose of the facility.

In addition, the company has completed steps to withdraw from Keiyo Ethylene Co., a naphtha cracker joint venture with Maruzen Petrochemical Co. and Sumitomo Chemical Co., in which Mitsui has a 22.5% interest.

We also remind that, as MRC informed previously, in October 2014, Huntsman commenced preliminary engineering to expand production of methylene diphenyl diisocyanate (MDI) by investment in a new, world-scale MDI plant at its complex in Geismar, Louisiana. The 400,000-tpy expansion will leverage the significant advantages of the Geismar site, with its access to US shale gas, strong logistics base and excellent integration. The new capacity is expected to come on-stream in 2018 and will enable Huntsman to further support the global growth of its customers.

MDI based polyurethanes are used in an extensive range of applications and markets - including construction, automotive, coatings and footwear - and provide key benefits of energy efficient insulation, comfort and well-being, according to Huntsman representatives.
MRC

MOSCOW (MRC) -- Refiner and petrochemical group INEOS Group was running equipment at its biggest plant, in Grangemouth, Scotland, at less than half capacity. That’s because its sources of raw materials - oil and gas fields in the North Sea - were depleting and the volume of fuel heading to the facility dwindling, as per Hydrocarbonprocessing.

Hoisting the roof in July onto an ethane storage tank large enough to hold 560 double-decker buses was a sign of the company’s reviving fortunes. Amid a USD1 billion overhaul - a life or death revamp for the plant - the biggest such container in Europe will store feedstock originating not from fields off Britain’s coast, but from as far away as Pennsylvania; gas produced amid the shale-fracking boom.

"We had to convince the site and the government that this is a workable plan," said John McNally, CEO of INEOS Olefins & Polymers UK. "It was the only plan, the survival plan for Grangemouth chemicals."

The story of INEOS shows how the US shale-drilling frenzy is altering the global energy landscape, and points to one possible future for Europe’s chemical and manufacturing industries. Output of crude oil and liquid fuels in the North Sea has fallen by 50% since 2005, while US exports of natural gas liquids and liquid refinery gases surged 16-fold in the period. The boom has driven the price of US ethane down 86% from a 2008 peak. It now costs about half as much as the same fuel in Western Europe.

The US-sourced fuel - exported from a Sunoco Logistics terminal in Marcus Hook, Pennsylvania - will feed plants including INEOS’s cracker, a machine that converts oil and gas into ethylene. The company is also seeking access to onshore British supplies, having acquired 12 shale gas exploration licenses. It will apply for permits, and will buy hydraulic fracking expertise if it wins permission to drill, McNally said.

INEOS isn't alone in tapping US gas. Borealis is spending USD135 million upgrading its cracking facilities in Sweden. It plans to source about two-thirds of its ethane from the North Sea, with the remainder coming from the US, said Markku Korvenranta, executive vice president for base chemicals. The Vienna-based petrochemicals company will also import US propane, he said.

As MRC wrote before, Ineos will invest around GBR 640m (USD1 billion) in shale gas exploration in the United Kingdom. The company plans to use the gas as a raw material for its chemicals plants, including Grangemouth in Stirlingshire. Grangemouth is currently running at a loss, but Ineos believes shale gas will transform the economics of the plant.

INEOS Group Limited is a privately owned multinational chemicals company consisting of 15 standalone business units, headquartered in Rolle, Switzerland and with its registered office in Lyndhurst, United Kingdom. It is the fourth largest chemicals company in the world measured by revenues (after BASF, Dow Chemical and LyondellBasell) and the largest privately owned company in the United Kingdom.
MRC