Ineos to provide US ethane to ExxonMobil, Shell for Scotland ethylene plant

MOSCOW (MRC) -- Ineos, ExxonMobil Chemical and Shell have reached a long-term sale and purchase agreement to secure ethane from US shale gas for the Fife ethylene plant (FEP) at Mossmorran, Scotland, said Ineos on its site.

The ethane supply will start from mid-2017.

The Fife plant will receive ethane from Ineos’ new import terminal in Grangemouth, Scotland. Access to this new source of feedstock will help complement supplies from North Sea natural gas fields.

The FEP is owned and operated by ExxonMobil, while Shell has 50% of capacity rights. Access to ethane from shale production will provide sufficient raw material to run UK steam crackers to make ethylene at full operating rates, according to company officials.

"This is a landmark agreement for everyone involved", said Geir Tuft, business director at Ineos O&P UK. "We know that ethane from US shale gas has transformed US manufacturing and we are now seeing this advantage being shared across Scotland."

Ineos has committed GBP450 million to construct the new ethane import terminal at its Grangemouth facility. It represents the most significant investment in UK petrochemical manufacturing in recent times, and is supported by both the UK and Scottish governments. An existing pipeline will transport the gas from Grangemouth to Fife.

“This agreement gives FEP access to the new infrastructure developed by Ineos, and in so doing brings US advantaged ethane to FEP," said Elise Nowee, general manager at Shell Chemicals for base chemicals in Europe. "The agreement will help us to meet the long-term needs of our ethylene customers."

The Fife ethylene plant is one of Europe's largest and most modern ethylene facilities. The plant started production in 1985, and is one of only four natural gas-fed steam crackers in Europe. It was the first plant specifically designed to use natural gas liquids from the North Sea as feedstock. Alongside Ineos Grangemouth, it supplies manufacturing in Scotland, the rest of the UK and export markets with ethylene. It has an annual capacity of 830,000 tons of ethylene.

As MRC informed previously, 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.

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

MOSCOW (MRC) -- Huntsman Corporation has announced that the company’s board of directors has declared a USD0.125 per share cash dividend on its common stock, as per the company's press release.

The dividend is payable on December 31, 2015, to stockholders of record as of December 15, 2015.

As MRC reported earlier, in October 2014, Huntsman Corporation completed the acquisition of the Performance Additives and Titanium Dioxide (TiO2) businesses of Rockwood Holdings, Inc.

And in February 2015, Huntsman announced that it plans to reduce its TiO2 capacity by approximately 100,000 tons, representing 13% of Huntsman's European TiO2 capacity. The plan will generate approximately USD35 million of annual savings. As part of the plan, Huntsman is proposing to close certain operations at its site in Calais, France. Huntsman says it will close the 'black end' manufacturing operations and ancillary activities during 2015.

Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated chemicals with 2013 revenues of over USD11 billion. Huntsman is a global manufacturer and marketer of differentiated chemicals. The company's operating companies manufacture products for a variety of global industries, including chemicals, plastics, automotive, aviation, textiles, footwear, paints and coatings, construction, technology, agriculture, health care, detergent, personal care, furniture, appliances and packaging.
MRC

MOSCOW (MRC) -- Samsung Engineering said Tuesday it was aiming to make a deal to build a petrochemical plant in Uzbekistan based on a conceptual study it will conduct for the country's state project, said Koreantimes.

"We have agreed with Uzbek Neftegaz, Uzbekistan's state-owned oil company, to conduct a conceptual study for a benzene-toluene-xylene plant. It is a kind of rough sketch of the facility, not yet a deal to build," said a company official.

Samsung Engineering will make every effort to earn the contract to build the BTX plant on an engineering, procurement and construction (EPC) base grounded on its partnership with Uzbekistan, he said. But the official didn't say anything about the value of the rough planning for the BTX plant.

Samsung Engineering, an affiliate of Samsung Group, plans to expand into member countries of the Commonwealth of Independent States, such as Uzbekistan, Kazakhstan and Azerbaijan, based on the possible EPC project in Uzbekistan, the official said.

"As we successfully built a polymer plant for Uzbek Neftegaz in a USD700 million EPC deal in July, the state company placed an order for the conceptual study for the BTX plant," he said.

In Azerbaijan in 2013, Samsung Engineering built a USD500 million fertilizer plant for the State Oil Company of the Azerbaijan Republic.

Korean engineering companies largely win EPC projects but the high value-added front and end engineering and design (FEED) projects are mostly taken by global majors such as Flour from the U.S., Technip from France, Saipem from Italy.

That's mainly due to the technology gap which still runs deep between Korean builders and their counterparts in Europe and the U.S.

Hit by snowballed manufacturing costs and declines in orders in past years, Samsung Engineering shifted to a net loss of 1.32 trillion won (USD1.1 billion) in the January-September period from a net profit of 64 billion won a year earlier, according to regulatory filing.

It also swung to an operating loss of 1.476 trillion won from an operating profit of 139.9 billion won during the same period, said the filing.

We remind that, as MRC wrote previously, in November 2014, South Korea's Samsung Group said it is selling stakes in four chemical and defence firms for 1.9 trillion won (USD1.72 billion) to Hanwha Group, the latest move in the massive task of restructuring the country's largest conglomerate.

Later, in the first decade of March 2015, South Korea's Fair Trade Commission (KFTC) gave conditional approval to Hanwha's proposed acquisition of Samsung General Chemicals.
MRC

MOSCOW (MRC) -- The production value of Taiwan's petrochemical industry is expected to increase between 3.1 percent and 4.2 percent in 2016 as oil prices stabilize, said Chinapost.

According to the Industrial Economic and Knowledge Center (IEK) under the Industrial Technology Research Institute, most research institutes believe oil prices will stabilize and remain low in 2016. This will help the profitability of Taiwan's petrochemical companies, which use naphtha as raw material, the IEK said.

Also, demand for petrochemical products in mainland China and other emerging markets such as India and Vietnam will support capacity utilization of Taiwan's petrochemical industry, the IEK said.

This will help increase Taiwan's production in the sector by 3.1-4.2 percent, it said. The IEK noted that in August 2014, the average price of Brent crude oil was US$101 per barrel, but the price plunged to USD46.9 in January 2015, falling 53.6 percent in just five months.

The drop in crude oil prices also led to a drop in naphtha prices, it said. The average price of naphtha was USD902.5 per metric ton in August 2014, but it fell to USD455 in January 2015, according to IEK.

The price difference between ethylene and naphtha was USD414 per metric ton in January 2015, and the difference widened to USD850 in June, IEK said.

In the first half of 2015, although the total revenue of the four major subsidiaries of the Formosa Plastics Group decreased 20.2 percent year-on-year to NTD770.74 billion, their total net profit jumped 36.1 percent to NT$74.42 billion, IEK said.

The group's four major subsidiaries are Formosa Plastics Corp., Nan Ya Plastics Corp., Formosa Chemical & Fibre Corp. and Formosa Petrochemical Corp.
MRC

MOSCOW (MRC) -- Brazil's state-run oil company Petroleo Brasileiro SA has announced two amendments to its contract to supply naphtha to Braskem SA, Latin America's largest petrochemical company are worth 950 million reais (USD252 million), as per Reuters.

The contract amendments extend the terms of an agreement for Petrobras to supply Braskem with naphtha, to Braskem operations in the Brazilian states of Sao Paulo, Bahia and Rio Grande do Sul for 45 days starting Nov 1. Petrobras maintains discussions with Braskem, seeking in these talks a naphtha price that reflects balanced commercial and exchange conditions for both companies, referencing international market prices for petroleum derivatives," Petrobras said in a statement.

Petrobras and Braskem have been negotiating a multi-billion-dollar naphtha-supply contract for months. A lack of a final agreement has led to a series of temporary extension agreements. Braskem, with 36 plants, 29 in Brazil and the rest abroad, including factories in the United States and Germany, is controlled by Brazil's Odebrecht Group.

Odebrecht is one of about two dozen construction and industrial companies involved in a giant price-fixing, bribery and political kickback scandal that has cost Petrobras and its government and non-government investors billions of dollars. Braskem depends on naphtha from Petrobras to operate its Brazilian plants, the dominant supplier of polyethylene, polypropylene and poly-vinyl-chloride (PVC) to Brazil, the world's seventh-largest economy.

Braskem's Brazilian plants, though, are in regions where Brazil's government, Petrobras' controlling shareholder, is keen to preserve jobs, making the naphtha contract politically sensitive. The scandal at Petrobras, and related investment and job cuts, has helped deepen Brazil's worst recession in decades.

Petrobras said it agreed to buy 82,000 cubic meters (515,764 barrels) of gasoline from Braskem, bolstering supplies of the fuel as Petrobras faces its biggest strike in 20 years.

Braskem is Brazilian main producer of polyethylene and polypropylene. In addition with ongoing plants located in both petrochemical complexes, in April 2008 Braskem opened a 300,000 metric ton polypropylene plant in the city of Paulinia (Sao Paulo).
MRC