Shell announces FM on supplies of butadiene from Singapore cracker

MOSCOW (MRC) -- Shell has issued a force majeure (FM) on supplies for butadiene from its cracker at Pulao Bukom, reported Apic-online.

A Polymerupdate source in Singapore informed that the FM was declared recently on supplies of butadiene. The cracker was forced to shutdown last week owing to technical issues.

Located at Bukom Island in Singapore, the cracker has butadiene production capacity of 186,000 mt/year.

As MRC informed previously, earlier in December, Shell also announced FM on supplies for ethylene and propylene from its cracker at Pulao Bukom.

In April 2015, Royal Dutch Shell completed a revamp and upgrade of its Singapore ethane cracker. The project increased production for the 800,000-tpy ethylene plant on Bukom Island by 20%. The ethylene and olefins unit is also integrated with Shell’s 500,000-bpd refinery.

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.

Indonesia formulated incentives for integrated petrochemical industry

MOSCOW (MRC) -- The Ministry of Industry has prepared a number of incentives for integrated upstream and downstream petrochemical industries in an effort to increase the added value and contribute towards the economy, reported GV.

"The downstream industrial products will have added value of up to USD500,000 per ton if we can make it integrated," Director General of Manufacturing Industry Base Harjanto said in Jakarta.

Speaking at the Refining & Petrochemical Innovation Conference, Harjanto said Indonesia’s chemical industries have yet to achieve their maximum production potential. This is because USD300 million worth of raw materials required for production are still imported.

He said that the upstream industry must be reinforced because many by-products from the chemical industry could be utilized by downstream industries, thus adding value.

Harjanto said the upstream petrochemical products in Indonesia included polyethylene (PE), polypropylene (PP) and styrene monomer (SM)/butadiene. About 14 other products could also be developed. The development of an integrated upstream industry needs a huge investment while, typically, it is an industry with slow yields, and needs sweeteners to make it attractive.

Investors will not be attracted if the indicator of investment worthiness, such as the International Rate of Return (IRR), is still below 12.

Vice President of PT Chandra Asri Petrochemical, Corporate Relations, Suhat Miyarso said the plan of state-owned oil and gas company Pertamina to build eight refinery plants for petrochemicals in 2016 will help create integrated upstream industries.

As MRC informed earlier, in March 2015, Chandra Asri Petrochemical is reportedly planning to build a naphtha refinery at its Cilegon complex in Banten, Indonesia, with an estimated investment of USD740m. The company is now undertaking a one year preliminary study for the proposed project, which would reduce its reliance on naptha imports. Chandra Asri plans to finance the preliminary study using USD250m funds allocated for capital expenditure this year. The funds will also be used to finalise the USD380m expansion of a naphtha cracker at the Cilegon complex to increase ethylene production capacity to 860,000 kilotonnes. It will also facilitate construction of a synthetic rubber plant in partnership with French firm, Michelin.

Fluor completes world-scale isononanol plant in China for BASF and Sinopec

MOSCOW (MRC) -- Fluor has completed a world-scale isononanol (INA) plant for BASF and China Petroleum & Chemical Corporation (Sinopec) in the Maoming Hi-tech Industrial Development Zone of Maoming, China, the global contractor announced on Thursday.

The plant, which is a first-of-its-kind in China, was recently inaugurated by the owners and will serve the growing demand for next-generation plasticizers.

Fluor applied its integrated project execution experience in China, including its knowledge of working with joint ventures involving multi-national foreign investors and Chinese national oil companies, to complete the project safely and on schedule.

"Completion of the INA plant demonstrates true excellence in execution backed by world-class safety and a focus on quality," said Ken Choudhary, Fluor’s president of energy and chemicals for the Asia-Pacific region. "This project is also a testament to our partnership with BASF and Sinopec which allowed us to complete the facility on time and on budget."The project is a continuation of the long-standing partnership between Fluor, BASF and Sinopec, and builds upon the successful completion of various projects at the Verbund site in Nanjing, China, according to company officials.

"This project is a great example of our One Fluor approach,” said Richard Meserole, Fluor’s vice president of construction. “We used the breadth of Fluor’s tools and knowledge to provide solutions to the project. Most importantly, we delivered the project safely and in a quality manner that met the business needs of our client.

As MRC informed previously, in September 2015, BASF began its first production of diphenylmethane diisocyanate (MDI) at its wholly-owned site in Chongqing, China. MDI is an important component for polyurethanes – an extremely versatile plastics material that contributes towards improved insulation, provides lighter materials for cars, and helps save energy in buildings. MDI production will support these key industries in China’s western areas.

BASF is the largest diversified chemical company in the world and is headquartered in Ludwigshafen, Germany. BASF produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries. BASF had sales of over EUR74 billion in 2014 and over 113,000 employees as of the end of the year.

Sinopec Corp. is one of the largest integrated energy and chemical companies in China. Its principal operations include the exploration and production, pipeline transportation and sale of petroleum and natural gas; the sale, storage and transportation of petroleum products, petrochemical products, coal chemical products, synthetic fibre, fertiliser and other chemical products; the import and export, including an import and export agency business, of petroleum, natural gas, petroleum products, petrochemical and chemical products, and other commodities and technologies; and research, development and application of technologies and information.

Shell wins final Australian approval for BG Group takeover

MOSCOW (MRC) -- Royal Dutch Shell’s takeover of BG Group has received approval from Australia’s Foreign Investment Review Board, clearing another of the hurdles for the tie-up to go ahead in early 2016, said the Telegraph.

Clearance from FIRB, which advises Australia’s treasurer and government on foreign investment, follows unconditional approval for the deal from Australia’s competition regulator last month.

After earlier clearances in Brazil and from the European Union, the deal now awaits a decision from China’s Ministry of Commerce to satisfy all necessary regulatory approvals. Shareholders still need to vote on the deal.

"The addition of BG’s integrated gas assets in Australia to Shell’s global portfolio is one of the main strategic drivers behind the recommended combination," Shell Chief Executive Ben van Beurden said in a statement.

He said the acquisition of BG remained on track to be completed early next year.

The tie-up with BG, a smaller British company with a strong position in liquefied natural gas and Brazil’s offshore oilfields, is a crucial part of Shell’s strategy to refocus on its natural-gas and deepwater oil businesses. The deal was valued at roughly USDUS70 billion when it was announced in April.

As part of the approval from FIRB in Australia, Shell said it would commit to a cooperative compliance approach to taxation arrangements for BG’s QGC natural gas unit in Australia, in line with its approach elsewhere.

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.

Pertamina begins operation of Cilacap RFCC refinery

MOSCOW (MRC) -- State owned oil and gas company PT Pertamina on 26 Nov 2015 officially launched the operation of a Residual Fluid Catalytic Cracking (RFCC) refinery in Cilacap, Central Java, to process the refinery's byproducts into value-added products, according to GV.

The Cilacap IV RFCC, that was officially launched by Vice President Jusuf Kalla, will process 62,000 barrels per day of low sulfur waxy residue (LSWR), which is generated from the crude distillation unit (CDU) II into valuable products, such as intermediate gasoline namely HOMC, LPG and propylene.

Pertamina President Director Dwi Soetjipto said that apart from creating valuable products, the Cilacap RFCC project provided jobs to 8,700 people during the construction of the project and required 400 employees for the refinery once it was in operation. "Cilacap RFCC also contributed taxes to the government and accelerated economic growth in the area around the project," Dwi said.

The facility, with an investment value of USD 846.89 million, started production on 30 Sept. 2015. The RFCC can produce 1,066 tons of LPG per day, 430 tons of propylene per day and about 37,000 barrels of HOMC per day.

As MRC wrote before, PT Pertamina and Saudi Aramco, the state-owned oil company of Saudi Arabia, have recently signed a Heads of Agreement (HoA) to formalize key business principles for joint ownership, operation and upgrade of the Cilacap Refinery located in Central Java, Indonesia as part of Pertamina’s Refinery Development Master Plan (RDMP).

Pertamina is an Indonesian state-owned oil and natural gas corporation based in Jakarta. It was created in August 1968 by the merger of Pertamin (established 1961) and Permina (established 1957). Pertamina is the world's largest producer and exporter of liquefied natural gas (LNG).