South Korean Government to reform petrochem industry

MOSCOW (MRC) -- The South Korean government is planning a restructuring of its petrochemical industry to deal with the oversupply of terephthalic acid, polystyrene, polyvinyl chloride and synthetic rubber, according to several local media reports, as per Apic-online.

Because of the oversupply, the government is urging petrochemical companies to voluntarily reorganize their businesses.

"The business sector should start corporate restructuring through facilities shutdown," said Yonhap News Agency quoting Trade, Industry and Energy Minister Joo Hyung-hwan. "The government will give full financial and tax support to those who carry out reform," he added.

"It is important for the petrochemical firms to take preemptive action to streamline their unnecessary busi-ness in preparation for higher petroleum prices and stronger competition from developing countries," Joo noted.

As MRC reported before, in early 2016, South Korea’s purified terephthalic acid (PTA) producers were urged to reduce production by 30% amid worsening market conditions, according to the government’s industrial restructuring plan.

The country’s petrochemical industry is one of the five industries that was recommended by the government to undergo restructuring, along with shipping, shipbuilding, steel and construction sectors. Since October 2015, the South Korean government has been pushing ahead with its plan for restructuring industries that have suffered from macroeconomic uncertainty including the slowdown of the Chinese economy and the US Federal Reserve’s interest rates hike.

FCFC shutting down nylon plant after failure to receive permits

MOSCOW (MRC) -- Formosa Chemicals & Fiber Corp.(FCFC), part of Formosa Petrochemical, announced on 30 Sept. 2016 that it would shut down its nylon production plant in central Taiwan, beginning next week, due to the government's failure to renew permits for FCFC's cogeneration equipment, Reuters reported.

Formosa has applied to renew the license 37 times, but the government rejected the applications, telling the company to apply for a new permit because the amount of coal and steam used in the production process has changed over the decades.

"We are facing a major crisis," said the report citing FCFC Vice Chairman Hong Fu-yuan. "We have stopped shipping raw materials used in making products today."

As MRC informed earlier, Formosa Petrochemical Corp. is studying the feasibility of building a USD9.4 bln industrial complex in St. James Parish, USA. The project, to be built on the west bank of the Mississippi River, would be one of the largest single-site ethylene production complexes in the world and result in the creation of 1,200 new direct jobs. The initial phase of construction and development was to begin in mid-2016, and the second phase would begin in 2022. Formosa Petrochemical Corp. is part of the Taiwanese Formosa Group, which operates three plastics manufacturing locations in East Baton Rouge and Pointe Coupee parishes.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company's plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).

Ras Laffan 2 condensate splitter in Qatar to launch in October

MOSCOW (MRC) -- Qatargas will start operations at its new Ras Laffan 2 condensate splitter by the end of October, doubling the Gulf state's capacity to process condensate, two sources with knowledge of the matter said Monday, reported Reuters.

The 146 Mbpd facility had been due to open in September, but was delayed due to technical problems, traders said.

It will process deodorized field condensate (DFC) and low sulfur field condensate to extract mostly naphtha and middle distillates.

Condensate exports from Qatar will drop from 500 Mbpd to about 350 Mbpd when the 146 Mbpd splitter starts operating, an official at Qatar Petroleum, Qatargas's state-owned majority shareholder, has said. That will enable the Gulf state to soak up some of its condensate at home as it faces growing competition for condensate sales overseas from US and Iranian light oil shipments.

Commissioning of the new splitter is "99%" complete and an imminent handover to operator Qatargas is likely to see the plant start up "within the next two weeks," a Doha-based source, who declined to be named because he was not authorized to speak publicly, told Reuters.

Japan's Chiyoda Corp. is building the refinery in a joint venture with Taiwan's CTCI Corp.

"We are at the final moment. There were no technical problems from our end," Chiyoda's general manager in Qatar, Toshiyuki Ito, told Reuters, but would not confirm a start-up date.

Qatari state-marketer Tasweeq withdrew offers for at least 1.5 MMbbl of prompt November-loading DFC last week, traders with knowledge of the matter said, possibly indicating the splitter is likely to open imminently.

Initial offers for November-loading cargoes had indicated that the condensate splitter was more likely to start operations in November than October as the oil firm was seen reducing its November feedstock requirements by opting to sell prompt cargoes, traders said.

Tasweeq sold 2 MMbbl of DFC for end-October loading prior to its offers for November-loading condensate supplies.

We remind that, as MRC informed before, in February 2016, Saudi Kayan Petrochemical Co. awarded Taiwan's CTCI Corp. a contract worth USD94.5 million (SAR 354.4 million) to build a new cracker at its complex in Jubail Industrial City. Under the deal, CTCI will manage the engineering, procurement and construction management (EPCM) for the project, which is located in the Eastern Province of Saudi Arabia. The company added that it will secure the related finance from local institutions, expecting to complete the new cracker in H2-2017.

PPG reaches agreement with Vitro for sale of flat glass operations

MOSCOW (MRC) -- PPG announced that it has completed the sale of its flat glass manufacturing and glass coatings operations to Vitro S.A.B. de C.V., a leading producer of flat glass and specialty products, said the producer at its site.

The sale includes PPG’s entire flat glass manufacturing and glass coatings operations, including production sites located in Fresno, California; Salem, Oregon; Carlisle, Pennsylvania; and Wichita Falls, Texas; four distribution/fabrication facilities located across Canada; and a research-and-development center located in Harmar, Pennsylvania, near Pittsburgh. The business manufactures glass that is fabricated into products used primarily in commercial and residential construction.

PPG will receive approximately USD750 million in gross cash proceeds. Upon completion of this transaction and PPG’s recently announced transaction to divest its European fiber glass operations, approximately 98 percent of PPG’s business portfolio will be focused on paints, coatings and specialty materials.

As MRC informed earlier, PPG Asian Paints Lanka Ltd. announced the launch in Sri Lanka of ENVIROBASE High Performance (HP) automotive refinish paints – the first eco-friendly waterborne automotive paints introduced in Sri Lanka for use by the refinishing industry.

PPG Industries, Inc. (PPG) is a global supplier of protective and decorative coatings. Performance Coatings, Industrial Coatings and Architectural Coatings- EMEA segments supply protective and decorative finishes for customers in a range of end use markets, including industrial equipment, appliances and packaging; factory-finished aluminum extrusions and steel and aluminum. Founded in 1883, PPG has global headquarters in Pittsburgh and operates in nearly 70 countries around the world. Reported net sales in 2014 were USD15.4 billion.

National Petrochemical : Petrochem shuts Saudi Polymers plant for maintenance

MOSCOW (MRC) -- National Petrochemical Company (Petrochem) has started the scheduled maintenance for the Saudi Polymers plant, said 4-traders.

Thus, the plant will be shut for 60 days, according to a bourse filing released on Sunday.

Petrochem, which owns a 65% stake in Saudi Polymers Company, said that the financial impact cannot be determined during the shutdown period due to price fluctuations, and expected it to appear in the fourth quarter of 2016 and the first quarter of 2017.

As MRC reported earlier, NPC plans to increase its investments in the petrochemical projects in order to accelerate their progress, wrote in October 2014 Fars News Agency, quoting NPC Deputy Head Mohammad Hassan Peyvandi. The company is legally permitted to have a 20% share in petrochemical investments, but this can increase to 49% in under developed regions.

The National Petrochemical Company (NPC), a subsidiary to the Iranian Petroleum Ministry, is owned by the government of the Islamic Republic of Iran. It is responsible for the development and operation of the country's petrochemical sector.