Texas ethane cracker on track for 2017 startup, Mexichem says

MOSCOW (MRC) -- Occidental Chemical Corp. (OxyChem) and Mexichem SAB de CV (Mexichem) remain on schedule to commission their 50-50 joint venture Ingleside Ethylene LLC’s 1.2 billion-lb/year (550,000-tonne/year) ethane cracker at Ingleside, Tex., in early 2017, said Ogj.

The cracker is due to enter operation and reach full rates of production during first-quarter 2017, as originally planned (OGJ Online, Nov. 1, 2013), Mexichem said in its latest earnings report.

Currently under construction at OxyChem’s existing plant in Ingleside, the USD1.5-billion cracker will process ethane feedstocks from US shale gas supplies to supply OxyChem with an ongoing source of ethylene for manufacturing vinyl chloride monomer, which Mexichem will use to produce polyvinyl chloride (PVC) resin and PVC piping systems.

The JV most recently let a contract to CB&I, Houston, to provide engineering, procurement, and construction for an ethylene storage complex in nearby Markham as part of the cracker project.

As MRC informed earlier, CB&I has been awarded a contract valued at approximately USD115 million, as part of the scope of the ethylene project, by Ingleside Ethylene LLC, a joint venture between Mexichem, S.A.B. de C.V. (Mexichem) and Occidental Chemical Corporation (OxyChem), a subsidiary of Occidental Petroleum Corporation, for the engineering, procurement and construction of an ethylene storage facility in Markham, Texas.

Occidental Petroleum Corporation (Oxy) is a California-based oil and gas exploration and production company with operations in the United States, the Middle East, North Africa, and South America. Oxychem is Oxy"s Texas-based subsidiary which manufacture polyvinyl chloride (PVC) resins, chlorine and caustic soda used in plastics, pharmaceuticals and water treatment chemicals.

Mexichem, of Tlalnepantla, an industrial municipality close to Mexico City, is Latin AmericaпїЅs largest manufacturer of PVC pipe, vinyl resins and compounds. The company has annual revenues of more than USD5 billion and has been listed on the Mexican Stock Exchange for more than 30 years.

MRC

China PTA demand outlook bullish in Q2 on expected rise PET consumption

MOSCOW (MRC) -- The demand outlook for China’s purified terephthalic acid (PTA) in the second quarter could be bullish amid expectation that polyethylene terephthalate (PET) seasonal operating rates will rise and boost demand for the feedstock, according to a source at a Chinese commodity hedge fund, reported TPS.

According to the source, several Chinese fund managers believe that PET and polyester operating rates are set to rise ahead of a traditional peak season in summer, where consumption of clothing and beverages drive PET production.

Another bullish factor in consideration is the continued closure of China's Xianglu Petrochemicals, which is unlikely to restart in the next three-to-six months, according to this source who was formerly an employee of the company.

"Personally, this could also be bullish news for paraxylene (PX)," the source said.

TPS operation data shows that Chinese PTA plants are likely to rev up production in anticipation of a PET demand revival.

China's biggest PTA maker Yisheng Petrochemical restarted its 2.2 million mt/year No. 4 PTA line February 22, and expects to restart its 2 million mt/year No. 3 unit H1 Mar. Both plants are located at Ningbo.

Meanwhile, Chinese PTA major Hengli Petrochemical had its 2.2 million mt/year No. 3 unit at Dalian unexpectedly shut on February 19 due to a technical issue, but is also gunning to restart before the end of February.
MRC

BASF to cut 350 jobs at plant biotechnology unit

MOSCOW (MRC) -- BASF is planning to cut around 350 jobs at its plant biotechnology R&D unit as part of its regular portfolio review, said Chemicals-technology.

With this move, the company intends to refocus its plant biotechnology research portfolio, as well as restructure its plant science operations. As part of the plan, around 140 positions in North America and 180 in Europe will be cut.

At present, BASF employs around 700 people at its plant biotechnology R&D unit, and the company's new restructuring plan will reduce the unit's workforce by half. The company plans to continue research and field sites situated in North Carolina and Iowa, US; Berlin and Limburgerhof, Germany; Ghent, Belgium; and Brazil, but, expects to reduce their size.

BASF's field testing sites in Kekaha, Hawaii and the sites in India and Puerto Rico will be shut down. The restructuring is slated to be closed by the end of this year.

BASF board of executive directors member and responsible for bioscience research Harald Schwager said: "We are confident that by refocusing our plant biotechnology portfolio, we will enable BASF to bring the most promising research projects to success. "We will discontinue projects with extremely high technical challenges, which would require significant time and financial investment."

Following the restructuring, the plant biotechnology research segment expects to focus on high potential projects in herbicide tolerance and fungal resistant soybean.

However, BASF will continue its project on polyunsaturated omega-3 fatty acids in canola seeds and its yield and stress collaboration deal in respect of corn and soybean with Monsanto will also remain unaffected.

Discovery and early development projects in yield and stress, such as corn and soybean will be streamlined, but, rice yield and corn fungal resistance projects will be suspended.

BASF made the decision to reorganise its performance chemicals division, cutting around 120 positions across the globe through this year.

BASF is the leading chemical company. It 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.
MRC

BASF Group 2015 net income declines, sales down 5.%

MOSCOW (MRC) -- BASF Group, the world's largest chemicals firm by sales, has reported that its 2015 net income decreased to 3.99 billion euros from 5.15 billion euros, last year, as per the company's report.

Earnings per share was 4.33 euros compared to 5.60 euros. Adjusted earnings per share was 5.00 euros compared to 5.44 euros. EBIT before special items decreased to 6.74 billion euros from 7.36 billion euros.

Sales revenue declined year-over-year to 70.45 billion euros from 74.33 billion euros.

The company proposed to increase the dividend by 0.10 euros to 2.90 euros per share.

In 2016, the company expects its sales will decline significantly. BASF Group expects to achieve a slightly lower level of EBIT before special items than in 2015.

We remind that BASF and Gazprom completed the swap of assets with equivalent value effective at the end of September 30, 2015, financially retroactive to April 1, 2013. With the swap, BASF is further expanding its production of oil and gas and has exited the gas trading and storage business.

As MRC informed before, from October 2015, BASF SE started to offer its customers in Europe GPPS (general purpose polystyrene) from its production facility in Ludwigshafen. As well as utilizing it for its own needs - polystyrene is used for example for manufacturing Neopor and Styrodur - a sufficient quantity is now available following the expiry of contractual obligations for it to be supplied to customers.

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.
MRC

Global Ethylene industry to spend over USD45 bln by 2020 for upcoming projects

MOSCOW (MRC) -- Global Ethylene industry is expected to spend around US$45.1 bln by 2020 for the upcoming projects. Russia, US and China are the top three countries by capital expenditure for projects by 2020, as per Research and Markets.

Global Ethylene capacity will experience considerable growth in the next five years with increase from 176.46 mln m tpa in 2015 to 217.19 mln m tpa by 2019.

Large capacity additions with more than 70 planned projects are expected to come online primarily in the US, Iran and China in the next five years. Rosneft Oil Company, Royal Dutch Shell Plc and China Petroleum & Chemical Corporation are the top three companies by capacity additions expected to come on-stream by 2019.

As MRC informed earlier, global ethylene market (Industry) was valued at USD156 bln in 2013 and is projected to reach USD234.2 bln by 2020, expanding at a CAGR of 6% from 2014 to 2020.


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