Petronas weighs sale to exit USD27 billion Canada LNG project

MOSCOW (MRC) -- Malaysian state oil firm Petroliam Nasional (Petronas) is considering selling its majority stake in a USD27 B Canadian LNG plant, three people familiar with the matter said last week, reported Reuters.

Petronas is weighing options for the project as a more than 50% slide in crude oil prices since the middle of 2014 has hit the group's profits and prompted cuts to capital expenditure and jobs.

Amid the cost-cutting, the economics of the Canadian project - which took three years to get approval due to environment concerns - have been called into question as LNG prices have fallen more than 70% in two years.

Petronas was given the go-ahead for the USD27.34 B project by the Canadian government earlier this week. It said then that executives would study the 190 conditions imposed by the authorities and conduct a review before deciding on the next steps.

The sources said Petronas has been considering a sale for months, after it became apparent that a Canadian approval was possible, but had yet to take a final decision. Other options are also being considered, including putting it on ice.

"They are going to be looking at gas prices, costs and returns before they make the final decision," said one of the sources. "It is a very tough call."

The Canadian project is Petronas' biggest foreign investment and seen as a sign of Malaysia's global energy ambitions. An exit would underscore the financial constraints at the state-run firm and also the soft outlook for LNG prices.

Petronas signed on for the project in 2012 through the acquisition of Canada's Progress Energy.

As MRC informed before, in December 2015, Petronas awarded the Johor port operatorship for its Refinery and Petrochemicals Integrated Development (RAPID) project to Johor Port Bhd (JPB). As the port operator, JPB will manage the operations and logistics functions at the material offloading facility (MOLF) for Petronas’ Refinery and Petrochemicals Integrated Development (RAPID) project in Pengerang.

Petronas plans to build a C6-based metallocene linear LDPE plant and a low density polyethylene (LDPE)/ethylene vinyl acetate (EVA) swing plant at its greenfield integrated refinery and petrochemical complex in southern Johor state by mid-2019. The proposed metallocene LLDPE will have a capacity of 350,000 tpa, while the LDPE/EVA will have a capacity of about 150,000 tpa. The two plants are part of Petronas' planned Refinery and Petrochemical Integrated Development project in Pengerang at Johor. RAPID includes a 300,000 bpd refinery and a petrochemical complex with a 3 million tpa steam cracker, and is expected to come onstream in mid-2019. The petrochemical complex will have the capacity to produce 7.7 million tpa of petrochemical products.

Petronas, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company wholly owned by the Government of Malaysia. The Group is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining; marketing and distribution of petroleum products; trading; gas processing and liquefaction; gas transmission pipeline network operations; marketing of liquefied natural gas; petrochemical manufacturing and marketing; shipping; automotive engineering; and property investment.
MRC

MOSCOW (MRC) -- Jacobs Engineering Group Inc. has received a multi-year contract from Olin Corp (Clayton, MO), said Jacobs on its site.

Jacobs is one of several companies providing engineering, procurement and construction management (EPCM) services for facilities in Freeport, Texas; Plaquemine, Louisiana; St. Gabriel, Louisiana; and McIntosh, Alabama.

Olin Chlor Alkali Products and Vinyls, based in Cleveland, Tennessee, is a North American manufacturer of chlorine, caustic soda, industrial bleach, hydrochloric acid, potassium hydroxide, hydrogen and related products.

As MRC informed earlier, in October 2015, Olin completed merger with Dow chlorine products businesses.

Olin Corporation manufactures chemicals and ammunition products. The Company manufactures and sells chlorine, caustic soda, sodium hydrosulfite, hydrochloric acid, hydrogen, sodium chlorate, bleach products, and potassium hydroxide. Olin also manufactures products that include sporting ammunition, reloading components, small caliber military ammunition and industrial cartridges.
MRC

MOSCOW (MRC) -- Taiwan’s state-owned CPC Corp is in plans to shut its No. 4 cracker for a maintenance turnaround, according to Apic-online.

A Polymerupdate source in Taiwan informed that the cracker is likely to be taken off-line on October 6, 2016. The planned maintenance is slated to remain in force for around 10-12 days.

Located in Linyuan, Taiwan, the cracker has an ethylene capacity of 380,000 mt/year and propylene capacity of 193,000 mt/year.

As MRC wrote before, CPC Corp. last restarted its No. 4 cracker following a maintenance turnaround on 1 February 2016. The cracker was shut on December 11, 2015.

CPC Corporation, Taiwan, is engaged in the exploration, production, refining, procurement, transportation, storage, and marketing of oil and gas. The company provides fuel oil, including automotive unleaded gasoline and diesel fuel, low-sulfur fuel oil, marine distillate fuels, marine residual fuels, and aviation fuel; petrochemicals, such as ethylene, propylene, butadiene, benzene, para-xylene, and ortho-xylene; liquefied petroleum gas products comprising liquefied petroleum gas, propane, butane, and a propane/butane mixture; lubricants, motor oil, industrial oil, grease, and marilube oil; SNC products, including petroleum ether, naphtha, toluene, xylene, crude octene, methyl alcohol, normal paraffin, viscosity-graded asphalt cement, and sulfur; and natural gas.
MRC

MOSCOW (MRC) -- State-owned Oman Oil Refineries and Petroleum Industries Company (Orpic)'s USD6.5 bln Liwa Plastics Industries Complex (LPIC) project has reached the stage of a detailed engineering phase, said Timesofoman.

The ground breaking ceremony for the Sohar part of the LPIC project is scheduled on October 10, according to a company release. The employees working on the project have been deployed at the engineering procurement and construction contractors’ offices in Seoul, Milan, The Hague and New Delhi and the overall project is on track.
Last year, Orpic awarded four contracts for engineering, procurement and contracting (EPC) packages worth US$4.5 bln for Liwa Plastics Industries Complex Project to CB&I and CTCI Corporation joint venture (steam cracker and utilities), Tecnimont (Plastics unit), NGL Extraction GS Engineering and Construction and Mitsui joint venture (NGL Extraction) and Punj Lloyd (NGL pipeline).

The USD6.5 billion project is the largest of the three strategic growth projects undertaken by Orpic to fulfil its vision of building an Omani integrated refining and petrochemical business. This project will be the first-of-its-kind in the Sultanate and upon commissioning in 2020, will transform Orpic’s product mix and business model, double company’s profit, create new business opportunities, generate significant employment opportunities and support the development of a downstream plastics industry in Oman. "We are confident that once our plants are commissioned and completed in 2020, LPIC will change Orpic’s product mix by extracting more value from natural gas and crude oil. Being located in Sohar as part of an integrated complex that also houses the Sohar Refinery, aromatics plant, polypropylene and steam cracker unit for LPIC, Orpic’s operations will be one of the most integrated refinery and petrochemical operations in the region and will enable the company to extract the maximum value from Oman’s oil and gas," said Musab Al Mahruqi, chief executive officer of Orpic.

Last year, Orpic awarded four contracts for engineering, procurement and contracting (EPC) packages worth $4.5 billion for Liwa Plastics Industries Complex Project to CB&I and CTCI Corporation joint venture (steam cracker and utilities), Tecnimont (Plastics unit), NGL Extraction GS Engineering and Construction and Mitsui joint venture (NGL Extraction) and Punj Lloyd (NGL pipeline).

LPIC is one of three strategic growth projects being delivered by Orpic namely Sohar Refinery Improvement Project, Muscat-Sohar Pipeline and Al Jifnain Terminal.

These projects will cement Orpic’s position as a market leader in Oman and the Middle East and the international oil and gas sector.

Orpic (Oman Oil Refineries and Petroleum Industries Company) is one of the leading companies in Oman and has two refineries in that country, in Sohar and Muscat. ORPIC is owned by the Government of the Sultanate of Oman and Oman Oil Company SAOC, the trading company created by the Government of the Sultanate of Oman for managing investments in the energy sector.
MRC

MOSCOW (MRC) -- The Linde Group and the specialty chemicals group Evonik Industries have intensified their collaboration in the area of membrane-based gas separation within the framework of the groundbreaking ceremony for the expansion of Evonik’s membrane production facility held in Schorfling (Austria) on September 30, said Evonik in its press release.

The heart of the collaboration comprises Evonik's polymer-based membrane technology, which will be used in the gas separation and purification plants of Linde’s Engineering Division. With this, Linde completes its portfolio, combining all relevant gas separation processes within one company. Evonik’s SEPURAN membranes enable gases such as methane, nitrogen, helium, and hydrogen to be particularly efficiently isolated in pure form from gas mixtures, thanks to more selective separation and higher productivity.

Tobias Keller, head of the Adsorption and Membrane Plants Product Line at Linde’s Engineering Division, says: "Evonik's high-selectivity membrane in combination with our other established gas separation technologies, such as our world-class adsorption technology, allows us an extraordinary flexibility in the development and application of new and more efficient purification processes. We are thus strengthening our position as the leading company for gas separation technologies over the entire lifecycle of a plant."

Dr. Axel Kobus, head of Evonik’s Fibres, Membranes & Specialties Product Line, says: "The synergies arising from the collaboration between our two companies are evident: The translation of our profund polymer and technology expertise into a powerful and wide-ranging membrane product portfolio perfectly complements Linde’s high expertise in plant engineering and gas separation. The combination offers the ideal conditions to jointly develop new markets for gas separation."

For more than 50 years the High Performance Polymers Business Line of Evonik’s Resource Efficiency Segment has been developing and producing high-performance polymers that allow new resource-efficient developments in a very wide range of fields.

As MRC informed before, in 2015, Essen-based Evonik Industries, a leading specialty chemicals manufacturer, invested over EUR400 mln in its plants in Germany. Last year, Evonik once again demonstrated its considerable power to create at its German sites. Thus, according to a recent projection, the company invested more than EUR 400 million in its domestic production plants. The lion’s share of the funds (around two-thirds) was divided among Evonik’s five-largest sites in Germany: Marl (hundreds of millions of euros), Hanau, Essen, Darmstadt, and Wesseling (tens of millions of euros at each site).

Evonik, the creative industrial group from Germany, is one of the world leaders in specialty chemicals. Its activities focus on the key megatrends health, nutrition, resource efficiency and globalization. Evonik benefits specifically from its innovative prowess and integrated technology platforms. Evonik is active in over 100 countries around the world.
MRC