Sipchem expects USD32 million cost hike in 2016 following natural gas price adjustment

MOSCOW (MRC) -- Saudi Arabia's Saudi International Petrochemical Company (Sipchem) expects its costs to rise by 120 million Saudi Riyals (USD31.98 million) in 2016 due to higher variable overheads, reported TPS with reference to the company's announcement.

The company is bracing for a financial impact due to higher energy prices and electricity tariffs, after the Kingdom of Saudi Arabia hiked its 2016 natural gas prices. These higher costs were expected to affect both the cost of feedstock, and the cost of energy required for operations.

Sipchem expects the financial impact of these higher costs to show up in its financial results starting from Q1 2016.

The company aims to boost production efficiency at its plants, rationalise expenditures, and grow its markets in order to offset cost rises.

As MRC reported earlier, Sipchem commenced trial runs at a new ethylene vinyl acetate (EVA)/low density polyethylene (LDPE) swing plant on July 26, 2014. Located in Jubail Saudi Arabia, the plant has a production capacity of 200,000 mt/year.

Established in 1999, Saudi International Petrochemical Company (Sipchem) manufactures and markets methanol, butanediol, tetrahydrofuran, acetic acid, acetic anhydride, vinyl acetate monomer. Besides, it has launched several down-stream projects to manufacture ethylene vinyl acetate, low density polyethylene, ethyl acetate, butyl acetate, cross linkable polyethylene, and semi conductive compound.
MRC

MOSCOW (MRC) -- Saudi Arabia's Petro Rabigh expects to complete all construction work at its second Rabigh plant by September 2016, reported TPS with reference to the company's announcement.

This means that the construction will be completed nine months later than originally planned.

The company stated that the Rabigh 2 project's infrastructure works were completed by the end of 2015, and that water and electrical facilities related to the expansion project are operational.

Petro Rabigh expects its ethane cracker capacity to rise to 125 million cubic feet per day by Q1 2016, and plans to gradually start up its new units from H2 2016.

The total cost of Rabigh 2 has risen by 1 billion Saudi Riyals ($266.49 million), to almost 31 billion Saudi Riyals ($8.26 billion) due to additions and delays to the project, the company said.

"We are expecting our paraxylene (PX) units to come onstream Dec 2016," a company source said.

As MRC informed previously, Petro Rabigh expects to take a Saudi Riyal 300 million (USD79.92 million) cost hit amid gas prices hikes starting 2016. This announcement came in response to Saudi Arabia's earlier decision to hike its ethane and methane prices for 2016.

PetroRabigh, a joint venture between Saudi Aramco and Japan's Sumitomo Chemical, has an annual output capacity of 18 million tonnes of refined products and 2.4 million tonnes of petrochemicals. Thus, the complex currently has a cracker to produce 1.3-million t/y of ethylene and 900,000 t/y of propylene, as well as downstream production of polyethylene, polypropylene, propylene oxide, ethylene glycol and butene-1.
MRC

MOSCOW (MRC) -- Cosmo Energy Holdings plans to become a majority shareholder in Maruzen Petrochemical by boosting its approximately 40% share in Maruzen to over 60% in terms of voting rights, according to several local sources, as per Apic-online.

Cosmo has filed paperwork with the Japan Fair Trade Commission in regards to the acquisition and will undergo the required screening to change Maruzen to a group subsidiary. The transaction is expected close by the end of this March.

Additionally, Cosmo is in negotiations with other Ma-ruzen investors to acquire another 15% interest.

Both companies have plants located next to each other in Ichihara, Chiba Prefecture, Japan. Consolidating operations would allow both companies to increase cost competitiveness by sharing raw materials and facilities.

As MRC informed before, in July 2015, Idemitsu signed an agreement to acquire Shell’s 33.24% stake in its Japanese venture Showa Shell Sekiyu KK for JPY 169 billion (approximately USD1.4 billion). Shell will retain a 1.80% holding in the company. The transaction is expected to complete in 2016, subject to obtaining regulatory and contractual approval.

Cosmo Energy Holdings Co., Ltd. operates as a holding company. The Company, through its subsidiaries, imports, refines, and sells crude oil as well engages in the independent development of oil resources.
MRC

MOSCOW (MRC) -- China's BP Zhuhai has restarted its No. 2 purified terephthalic acid (PTA) production unit after a 15-day turnaround, industry sources told TPS Monday.

The plant was shut on Dec 25, 2015, after maintenance was postponed from H2 Nov to H2 Dec.

BP Zhuhai's No. 2 unit in Huanan annual capacity is 1.1 million mt/year. According to TPS estimates, a 15-day downtime would result in the loss of 45,205 mt of PTA. This translates to about 45 standard-sized parcels in stoppage losses.

As MRC reported earlier, BP on July 3 celebrated the official start-up of the Phase 3 PTA plant of Zhuhai Chemical Co., enhancing its position in the PTA market and its long-term commitment in China. The completed Phase 3 plant, with a design production capacity of 1.25 million tonnes per year, is the world’s largest single train PTA unit, according to BP.

BP Zhuhai Chemical Company was formed in 1997 as a joint venture between BP, which holds 85% stake, and Zhuhai Port Co, with 15% stake.

BP is one of the world's leading international oil and gas companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items.
MRC

MOSCOW (MRC) -- Belgian chemicals group Solvay is planning to sell its polyamide business and has given investment bank Goldman Sachs a mandate to find a buyer, said PRW, citing reports.

According to Belgian business daily De Tijd, a number of financial or industrial players could be buyers.

Polyamides, which can take the form of nylon, are used in textiles, carpets, clothing and car seats. Solvay declined to comment on the article, which cited multiple unidentified sources.

Solvay has steadily shifted from a base chemical and plastics company to one making speciality materials used by the oil and gas sector or in cosmetics and high-performance polymers.

However the firm declined to confirm the potential sale.

Solvay spokeswoman Caroline Jacobs told PRW: "The only thing we can say is that Solvay never comments on market rumours."

Solvay will target business opportunities in advanced lightweighting materials for the aerospace and automotive industries and in speciality chemicals for mining, following its acquisition of Cytec in December.

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.

MRC