Petrobras to reduce investment plan by 5%

MOSCOW (MRC) -- Petroleo Brasileiro SA will cut its 2016-2020 investment plan by 5% to USD93 billion as the state-run oil company contends with dwindling oil prices and a massive corruption investigation, said Reuters.

The embattled Brazilian company, known as Petrobras, could reduce its investments even further if a series of planned debt-reducing asset sales are completed, the paper reported without citing sources.

The press office of Petrobras did not respond immediately to an emailed request for comment.

The company, which has a USD130 billion debt pile, has already cut its investment plans to USD98.4 billion from USD130.3 billion and last month had its Moody's credit rating reduced to non-investment grade.

The potential for a boost from big oil discoveries off the coast of Brazil appear to have faded, meanwhile, with the company's announcement of on Friday of a 20 percent cut to its oil and gas reserves.

As MRC informed earlier, Petroleo Brasileiro SA agreed to sign a naphtha supply contract with Braskem SA, Latin America's largest petrochemical producer, for five years. Under terms of the deal, which was announced in a securities filing, Braskem will pay the equivalent of 102.1% of the benchmark ARA price for naphtha, a petrochemical feedstock.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.

China Ningbo Mitsubishi PTA unit restart hampered by frozen pipes

MOSCOW (MRC) -- China’s Ningbo Mitsubishi Chemical Company (NMC) has delayed the restart of its purified terephthalic acid (PTA) plant, industry sources told TPS.

"(The plant's) pipes had frozen, and it could mean they might only restart by January 28, or this weekend" the source told TPS.

A cold wave descended upon China last week, dropping temperatures below zero degrees Celsius.

The company's plant in Ningbo, Zhejiang province, has a nameplate capacity of 600,000 mt/year, but usually operates at a rate of 700,000 mt/year. The plant was originally intended to restart on January 25 after a 10-day turnaround, which began on January 14.

Based on TPS estimates, assuming the plant runs at a rate of 700,000 mt/year, a 11-day halt in production would result in a stoppage loss of 21,095 mt of PTA or 21 standard size parcels.

Ningbo Mitsubishi's plant is a joint venture between China’s CITIC Group (10%) and Ningbo PTA Investment Company (NPI, 90%)). The stakes in NPI is split between Mitsubishi Chemical Company (61%), Itochu (35%) and Mitsubishi Corp (4%).

As MRC informed previously, Mitsubishi Chemical shut down its No. 2 naphtha cracker on January 22, 2016, owing to a technical glitch. The exact duration of the outage could not be ascertained. Located in Kashima, Japan, the plant has an ethylene capacity of 526,000 mt/year and propylene capacity of 260,000 mt/year.

Mitsubishi Chemical with headquarters in Tokyo, Japan, is a diversified chemical company involved in petrochemicals, polymers, agrochemicals, speciality chemicals and pharmaceuticals. The company's main focus is on three business pillars: petrochemicals, performance and functional products, and health care.

JUPC brings forward maintenance for No. 1 MEG unit in Jubail

MOSCOW (MRC) -- Saudi Arabia's Jubail United Petrochemical Company (JUPC), a wholly-owned subsidiary of Sabic, has brought forward scheduled maintenance on its No. 1 monoethylene glycol (MEG) unit, industry sources told TPS.

Maintenance on the company's No. 1 MEG unit, which has an annual capacity of 700,000 mt/year, has been pushed earlier to start somewhere within H2 February and H1 March. The unit, located in Saudi Arabia's Al-Jubail industrial city, was originally scheduled to undergo maintenance in H2 March.

According to sources, the plant is expected to be down for about 50 days. Assuming it runs at 100% capacity, this could result in a stoppage loss of 95,890 mt of MEG, or 95 standard-sized parcels.

SABIC holds a 75% stake on JUPC, which was established in 2001. The company has three petrochemical production facilities in Jubail making ethylene, propylene, ethylene glycol and linear alpha olefins (LAO).

We remind that, as MRC informed previously, in October 2015, Sabic announced a restructuring to make itself more agile and cost-efficient, following a comprehensive review of the challenges facing the Middle East’s biggest petrochemicals company. The new organizational structure should be in place by January 1, the company said in its statement then. Sabic’s innovative plastics unit will be broken up and reallocated to other divisions, including chemicals and polymers and a new unit called specialties.

Saudi Basic Industries Corporation (Sabic) ranks among the worldпїЅs top petrochemical companies. The company is among the worldпїЅs market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.

Lotte and LG cut MEG operating rates at Daesan units due to technical issues

MOSCOW (MRC) -- South Korea's LG Chemical and Lotte Chemical reduced their operating rates for monoethylene glycol (MEG) production facilities in Daesan last week due to technical problems, a company source from LG told TPS.

"Both plants have lowered rates to 80% due to steam problems," the source said.

The source said it was likely that both factories will resume maximum capacity by the end of the month.

LG Chemical's plant in Daesan has an annual production capacity of 108,000 mt /year, while Lotte's affected line makes 400,000 mt of MEG year. Lotte's separate 300,000 mt/year line at the same compound was unaffected.

As MRC wrote before, the Lotte Group currently has a presence in Indonesia via its subsidiary, Honam Petrochemicals, which acquired Malaysia’s polyolefin major Titan Chemicals in July 2010. Included in the acquisition was Titan’s Indonesian subsidiary - PT Titan Petrokimia Nusantara (TPN), which has a polyethylene (PE) production capacity of 450,000 tonnes/year.

LG Chem Ltd., often referred to as LG Chemical, is the largest Korean chemical company and is headquartered in Seoul, South Korea. According to ICIS report, it is 15th biggest chemical company in the world in 2011. It has eight domestic factories and global network of 29 business locations in 15 countries. LG Chem is a manufacturer, supplier, and exporter of petrochemical goods, IT&E Materials and Energy Solutions.

Lubrizol sets up CPVC compounding plant at Dahej

MOSCOW (MRC) -- Speciality chemicals major Lubrizol Corporation today announced the commencement of its USD50 million chlorinated polyvinyl chloride ( CPVC) compounding plant in Dahej, said the company on its site.

This would be the company's first CPVC compounding plant in the country, and it claimed that it is the first such in India by any global major.

The plant has a capacity to produce nearly 55,000 tonnes of compounds annually. The company has invested over USD50 million (Rs325 crore) on this facility.

Spread over a 100,000 square meter area in the chemical park complex of Gujarat Industrial Development Corporation (GIDC), the latest plant represents Lubrizol's expansion of FlowGuard, BlazeMaster and Corzan compound manufacturing sites.

Eric Schnur, President, Lubrizol Advanced Materials, said here today, "Dahej provides us with excellent infrastructure and also easy access to raw materials. It took us 2.3 million man-hours to complete this facility."

This is part of the USD200 million (Rs1,300 crore) investment announced by Lubrizol in 2013, which included the opening up of a resin manufacturing plant at Rayong, Thailand and an expansion facility at Louisville, Kentucky, USA.

Manoj Dhar, Head, TempRite Engineered Polymers, South Asia, said the CPVC market size in India is nearly 85,000 to 90,000 tonnes annually, and that Lubrizol enjoys the majority share in the market.

The Lubrizol Corporation, a Berkshire Hathaway company, is an innovative specialty chemical company that apart from its production develops and supplies technologies to customers in the global transportation, industrial and consumer markets. Lubrizol is providing innovative solutions for its customers high-performance application needs and remains committed to ongoing investment in its CPVC capabilities that support future growth. With headquarters in Wickliffe, Ohio, Lubrizol owns and operates manufacturing facilities in 17 countries, as well as sales and technical offices around the world. Founded in 1928, Lubrizol has approximately 8,000 employees worldwide. Revenues for 2013 were USD6.4 billion.