Axiall and Lotte Chemical break ground on its grassroots ethane cracker

MOSCOW (MRC) -- LACC LLC, the joint-venture company formed by Axiall Corp. and Lotte Chemical Corp., held a groundbreaking ceremony at its Calcasieu Parish, La. construction site, as per Hydrocarbonprocessing.

This follows a December 2015 announcement that the boards of Lotte and Axiall reached final investment decisions to construct an ethane cracker facility adjacent to Axiall’s existing Lake Charles complex. In addition to constructing the ethane cracker that is expected to produce 1 MMtpy of ethylene, Lotte Chemical will also construct an adjacent plant to produce 700 Mtpy of ethylene glycol (EG).

"Among Korean petrochemical companies, Lotte Chemical is the first to locate a project in the US; as such, this project represents a significant investment by Lotte Chemical," said Soo Young Huh, Lotte Chemical president and chief executive officer.

"For Axiall this commitment marks the next phase of our continued investment in the Lake Charles area," said Tim Mann, Axiall president and chief executive officer. "Our construction site is just west of our largest chemicals plant, where we have operated for nearly 70 years."

The groundbreaking marks the beginning of the construction phase, which follows months of land clearing and preparation on approximately 250 acres at the southwest corner of the interchange of Interstate highways 10 and 210 in the greater Lake Charles, La. area. The groundbreaking ceremony brought together business and government leaders from the Republic of Korea, the State of Louisiana, as well as senior executives of Lotte Group, Lotte Chemical and Axiall Corp.

Building the new chemical facilities is expected to have a positive economic impact on southwestern Louisiana. The total capital investment in the facilities is estimated to be USD3 B. Together, the facilities are expected to create more than 200 new direct jobs and over 1,800 indirect jobs in the community. In addition, an estimated 2,000 temporary construction jobs are expected to be created during the project.

CB&I will execute the main steam cracker contract, using its proprietary technology, following successful completion of front-end engineering and design, and other early-stage engineering works. LACC will engage a number of other firms to execute ancillary offsite facilities developments and tie-ins to existing infrastructure.

The state-of-the-art steam cracking facility will be built adjacent to Axiall’s largest chlor-alkali chemical facility, located in Lake Charles, to take advantage of Axiall’s existing infrastructure, access to competitive feedstock resources, and ethylene distribution infrastructure. The facility’s anticipated start-up would be in early 2019.

As MRC wrote previously, in June 2015, US based Axiall Corporation and South Korean Lotte Chemical Corporation have finalised a joint venture (JV) agreement to construct an ethane cracker. And in December 2015, they made the final investment decision. LACC LLC will invest USD1.9 billion to build the steam cracker adjacent to Axiall’s Lake Charles chlor-alkali manufacturing plants to take advantage of existing infrastructure, competitive US shale feedstock resources, and ethylene distribution infrastructure, according to a series of releases from the JV and Louisiana Economic Development (LED).

Lotte Chemical is a member of the Lotte Group in Korea, which has been listed on the Korean Stock Exchange since 1991. Lotte Chemical is a leading manufacturer of petrochemical products, such as ethylene, propylene, butadiene, polyethylene, polypropylene, ethylene oxide/glycol, compound resin, polyethylene terephthalate, polycarbonate, methyl methacrylate, ethylene oxide derivatives, benzene, toluene, mixed xylene, purified terephthalic acid and purified isophthalic acid among others. Lotte Chemical, headquartered in Seoul, South Korea, has manufacturing facilities located throughout South Korea, China, Malaysia, Indonesia, Pakistan, UK and the USA.

Axiall Corporation is a leading integrated chemicals and building products company. Headquartered in Atlanta, Axiall has manufacturing facilities located throughout North America and in Asia to provide industry-leading materials and services to customers.

BASF Shanghai Coatings starts building Shanghai automotive coatings plant

MOSCOW (MRC) -- BASF Shanghai Coatings has started construction on an automotive coatings plant at its Shanghai Chemical Industry Park in Caojing, China, said Chemicals-technology.

BASF will invest around EUR140m in the new plant, which is expected to become operational in the fourth quarter of 2017. As part of the latest investment of the joint venture between BASF and Shanghai Huayi Fine Chemical, the new facility is an expansion of the automotive coatings plant that started production in 2014.

BASF Greater China chairman and president Dr Stephan Kothrade said: "With the expansion, we continue to invest in local production to get even closer to China's automotive industry. "BASF will take an active role in developing this rapidly growing business, based on our local production network, innovative power and market knowledge."

BASF coatings solutions Dr Markus Kamieth said: "Our automotive OEM customers in China are increasingly looking for innovative, eco-efficient coatings solutions to drive sustainability in their processes. Adding world-class manufacturing and R&D capabilities in the country is our contribution to the rapidly evolving expectations of the automotive industry.

"This new investment in China is another example of our ongoing growth strategy in this region and in our automotive coatings business."

As well as the new facility, BASF operates a production facility for resins and electrocoat at the same site.

The proximity of these plants is expected to lead to more synergies and efficiency.

As MRC informed earlier, in April 2016, AkzoNobel said it is in discussions with BASF to acquire BASF’s industrial coatings business.

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.

Technip acquires ethanol-to-ethylene technology from BP

MOSCOW (MRC) -- Technip, a world leader in project management, engineering and construction for the energy industry has announced the acquisition of Hummingbird ethanol to ethylene technology from BP Chemicals, said the company on its site.

The technology converts ethanol to ethylene through dehydration, utilising a proprietary catalyst operating under mild operating conditions.

"This acquisition progresses Technip's onshore strategy to add process technologies that differentiate us and bring value to our customers. Hummingbird allows us to offer customers an alternative method to produce sustainable products from bio-based materials while expanding our technology positions in ethylene-derived chemicals and plastics such as polyethylene (PE), ethyl benzene styrene monomer (EB/SM) and polyethylene therephthalate (PET)," said Stan Knez, president, Technip.

The Hummingbird technology is cost effective and simpler compared to the previous technologies. The technology is available for licensing from Technip's center in Milton Keynes, United Kingdom. Ongoing catalyst development will be provided by the Technip Research Center in Massachusetts, US.

"BP has a strong track record of developing differentiated technologies. We are pleased to see our Hummingbird process taken to the market by Technip, a world-class technology licensing and engineering company," said Angello Amorelli, vice president BP Group Research.

As MRC informed earlier, Technip was awarded a contract by CTCI Corp. (Taiwan) to provide basic engineering and proprietary equipment for a grassroots ethylene cracking furnace at the Saudi Kayan Petrochemical Co.’s petrochemical complex in Jubail, Saudi Arabia. The furnace design will be based on Technip’s proprietary USC furnace technology.

Technip is a world leader in project management, engineering and construction for the energy industry.
Present in 45 countries, Technip has state-of-the-art industrial assets on all continents and operates a fleet of specialized vessels for pipeline installation and subsea construction.

Pertamina to take one LPG cargo a month over a year from Iran

MOSCOW (MRC) -- Indonesia is taking its first 44,000-mt LPG cargo from Iran in August under a one-year renewable contract signed recently, in which state-run Pertamina will take one monthly cargo, reported Apic-online with reference to a source familiar with the matter.

Pertamina will normally seek an evenly split cargo of propane and butane, though it will be up to the National Iranian Oil Co., or NIOC, to allocate the parcel split depending on availability and timing. This could include a cargo comprising 33,000 mt propane and 11,000 mt butane, or vice versa, the source added.

"We are waiting for Iran to allocate the volumes to Pertamina. All the commercial side has been done," the source said. "The first cargo is expected in August."

The source said Pertamina requires new term contracts because its current term import volumes are not sufficient to meet growing demand.

Pertamina's 10-year term supply contract with international trading firm Petredec is also due to expire in 2018. The contract volumes for 2016 are around 1.22 million mt, steady from last year.

The source said Pertamina plans to issue a tender next year ahead of the expiry of the Petredec deal, though the duration of the new contract - which will be opened to as many trading firm as possible - will likely be limited to one to three years. This was in view of the wider supply sources and low prices seen over the past year.

Long-term contracts will likely be restricted to government-to-government agreements, he said.

As MRC wrote previously, in April 2016, it was announced that Indonesia is strengthening its bilateral cooperation with Iran particularly in the oil and gas sector following the recent removal of sanctions on Iran, one of the world’s biggest oil producers. During a bilateral meeting in Bogor, West Java, the two countries agreed to cooperate in the upstream oil and gas sector, and data and technology exchange. The Energy and Mineral Resources Ministry’s oil and gas director general Wiratmaja Puja said Iran offered to supply crude oil, condensate and liquefied petroleum gas (LPG) as well as to develop refineries in Indonesia. In addition, the two countries also agreed to develop human resources as well as conduct research and development together.

Besides, in May 2016, Indonesia’s PT Pertamina (Persoro) and Saudi Aramco let a contract to a subsidiary of Amec Foster Wheeler PLC to provide engineering and project management services for the upgrade and expansion of the 348,000-b/d Cilacap refinery on Java, Indonesia. Amec Foster Wheeler Energy Ltd. will execute the basic engineering design study as well as finalize the process configuration and licensors’ packages for the proposed upgrading project over the next 9 months. The overall expansion, which comes as part of Pertamina’s Refinery Development Master Plan (RDMP) to increase Indonesia’s energy security and ensure the long-term competitiveness of its refineries (OGJ Online, Oct. 7, 2013), will cost an estimated USD4-5 billion, the companies said.

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).

Kuwait orders investigation into US Dow Petrochemical deal

MOSCOW (MRC) -- Kuwait has asked the public prosecutor to open an investigation into a scrapped deal with US firm Dow Chemical that resulted in a USD2.2 bln fine, as per ArabNews.

Citing an unnamed high-ranking source, Al-Qabas daily said the government last week sent a large number of documents to the public prosecutor all the details about the deal.

The documents included the names of officials who have been associated with the USD17.4 billion joint venture. Kuwait and US petrochemicals giant Dow Chemical signed the deal in 2008 but the emirate unilaterally scrapped it later in the same year due to a political dispute between the government and parliament.

The International Chamber of Commerce, acting as an arbitrator, later ordered Kuwait to pay a penalty of USD2.2 bln for scrapping the deal. The government paid the fine in May 2013 although parliament had warned against making the payment before conducting a probe.

The oil-rich Gulf state's move comes six months after a parliamentary probe into the case urged the government to prosecute 24 ex-officials, including two former oil ministers and several top former industry executives.

The parliamentary probe report, debated by MPs in December, charged the officials of squandering public funds and making illegal profits.

As MRC informed before, in December 2015, Dow Chemical finalized the transaction to sell its ownership interest in MEGlobal to EQUATE Petrochemical Company K.S.C. and has received USD1.5 billion in pre-tax proceeds. Dow had previously announced its intent to optimize its ownership in its Kuwaiti Joint Ventures and the closure of this transaction represents progress toward delivering this commitment.

The Dow Chemical Company is an American multinational chemical corporation. As of 2007, it is the second-largest chemical manufacturer in the world by revenue (after BASF) and as of February 2009, the third-largest chemical company in the world by market capitalization (after BASF and DuPont). Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber.