Jiangsu Sailboat petchem starts Honeywell UOP methanol-to-olefins unit

MOSCOW (MRC) -- Honeywell announced that Jiangsu Sailboat Petrochemical Company, Ltd. started its UOP Advanced Methanol-to-Olefins (MTO) unit during a 10-day test to confirm successful operation, as per Hydrocarbonprocessing.

When the full unit goes on line, it will have an annual production capacity of 833,000 mtpy, making it the largest single-train MTO unit in the world.

Located in Lianyungang City in China's Jiangsu Province, the Sailboat facility will produce propylene for the production of acrylonitrile, which is used to make clothing and fabrics, and high performance polymers used in automotive parts, hard hats and other hard plastic products. The plant also will produce ethylene for the production of ethylene vinyl acetate copolymers, which are used to make adhesives, foams, medical devices, photovoltaic cells, and other products, as well as C4 olefins for the production of butadiene, an ingredient in synthetic rubber.

"We expect China to invest more than USD100 billion in coal-to-chemicals technology in the next five years," said Mike Millard, vice president and general manager of UOP's Process Technology and Equipment business. "With China's demand growth for propylene of 7% per year, ethylene demand growing nearly 6%, and butadiene at almost 4%, our Advanced MTO process provides an excellent solution to meet that demand."

Ethylene and propylene, the two most widely used components to make plastics in the world, have traditionally been derived from crude oil. For regions such as China that lack domestic sources of crude oil, the Advanced MTO Technology allows for the use of other more economical feedstocks such as coal and natural gas.

Jiangsu Sailboat chose the Advanced MTO process because it produces the highest yields of light olefins at the lowest cost of production, with the lowest catalyst consumption and the lowest operating cost. In addition, the unit is configured for production of C4 olefins, as well as ethylene and propylene.

Honeywell UOP's Advanced MTO process combines the UOP/Hydro MTO process and the Total/UOP Olefin Cracking Process to significantly increase yields and feedstock efficiency. The process converts methanol from coal and natural gas into ethylene and propylene. At the heart of the technology are UOP's proprietary catalysts, which make it possible to efficiently adjust the ratio of propylene and ethylene produced so operators can most effectively meet demand for those products.

Solvay completes the sale of its Vinythai stake to AGC Asahi Glass

МОSCOW (MRC) -- Solvay has completed the divestment of its 58.77 percent stake in its Thai subsidiary Vinythai PCL to Japanese company AGC Asahi Glass. The transaction was based on a total enterprise value of 16.5 billion Thai Baht (EUR435 million), said the producer on its site.

The deal was first announced in December last year.

As MRC informed before, in mid-Decmeber 2016, Solvay obtained clearance from the Brazilian antitrust authority, CADE, for the agreed sale of its 70.59% stake in Solvay Indupa to chemical group Unipar Carbocloro. Completion of the transaction, at a total enterprise value of USD 202.2 million as announced in May, is expected to take place in the next weeks. Solvay Indupa produces PVC and caustic soda in Brazil and Argentina.

Earlier, in 2014, Argentina's stock regulator rejected as inadequate an offer from Brazil's Braskem, Latin America's largest petrochemical company, to buy the roughly 30% of the shares of plastic maker Solvay Indupa that are publicly traded. Solvay Indupa is the Argentine-Brazilian unit of Belgium's Solvay, which owns 70.59% of the company.

Created in 1948, PVC and caustic soda producer Solvay Indupa has 956 employees and two production sites in Brazil and Argentina. Indupa, with a manufacturing capacity of more than 500,000 tpa of PVC, runs facilities at Santo Andre, Brazil, and Bahia Blanca, Argentina.

Solvay, with a market share 27%, is the second largest PVC manufacturer in Europe, after Kerling with 29% of the market. Solvay is headquartered in Brussels with about 30,900 employees spread across 53 countries. It generated pro forma net sales of EUR12.4 bn in 2015, with 90% made from activities where it ranks among the world’s top 3 players.

Vitol and Galaxy Energy win Rosneft tender for Urals crude

MOSCOW (MRC) -- Russia's Rosneft awarded a sell tender for Urals crude oil for loading from Primorsk, Ust-Luga and Novorossiisk between April and September to traders Vitol and Monaco-based Galaxy Energy, four market sources told Reuters.

Vitol won the right to load from 1.2 MMt to 3 MMt for loading from Baltic ports and between 0.48 MMt and 1.44 MMt loading from Novorossiisk in 80,000 t cargoes, traders said.

Galaxy Energy won 0.84 MMt to 2.52 MMt of Urals loading from Novorossiisk in 140,000 t cargoes.

Rosneft had offered to sell between 2.52 MMt and 6.96 MMt of Urals crude oil for loading from the three ports.

Vitol also buys Urals from Rosneft under a five-year prefinance agreement. Galaxy Energy has not previously bought Urals crude from Rosneft.

As MRC informed earlier, Rosneft and Sinopec in January 2016 signed a Memorandum of Understanding regarding cooperation in gas and petroleum chemicals projects to be developed in East Siberia. The memorandum envisions a detailed pre-feasibility and concept design study for a joint venture that would include the conversion of natural gas and its liquid fractions to ethylene and propylene with integrated downstream production.

Rosneft became Russia's largest publicly traded oil company in March 2013 after the USD55 billion takeover of TNK-BP, which was Russia’s third-largest oil producer at the time.

Saudi Aramco in lead to buy OMV Turkish unit Petrol Ofisi

MOSCOW (MRC) -- Oil giant Saudi Aramco is believed to be the front-runner to buy Turkish fuel stations business Petrol Ofisi from Austrian oil group OMV, said Reuters.

Saudi Aramco has placed a bid and is awaiting the result, said one source who declined to be identified because the matter is not public. An OMV spokesman said the firm had received binding offers for Petrol Ofisi, which generated sales of around USD10.5 billion in 2015, but declined to give details.

A Saudi Aramco spokesman said the company did not comment on rumour or speculation. Other sources aware of the matter said State Oil Company of Azerbaijan (SOCAR) had also placed a bid.

For SOCAR, owning a large number of petrol stations in Turkey would offer a natural outlet for the Star refinery it is building in Turkey and hoping to complete next year. Last October, SOCAR acquired OMV's Aliaga storage terminal in Turkey.

SOCAR was not immediately available for comment.

OMV said this month it expected to conclude the sale of Petrol Ofisi in 2017.

"It is a secure long-term outlet for refined products in a market adjacent to Aramco's operations," said Sadad al-Husseini, a former senior executive at Saudi Aramco.

Turkish President Tayyip Erdogan visited Saudi Arabia on Feb. 14 and met King Salman. His big delegation included energy minister Berat Albayrak.

Saudi Aramco plans to raise refining capacity to 8-10 million barrels per day (bpd) from around 5.4 million now, to be closer to its key markets and expand its global refining footprint.

OMV said last year it was putting its Turkish arm up for sale as part of a drive to focus on its upstream oil and gas production businesses, as well as its integrated downstream refining, sales and distribution operations.

Turkey has some of the highest fuel prices in Europe but taxes and other regulations leave little margin for profit for the 70 different retailers.

According to the latest data from Turkish energy watchdog EPDK, Petrol Ofisi sold 530,206 t of gasoline, diesel, fuel oil, jet fuel and other fuel in November in Turkey, and had a market share of 22.7%.

In 2015, it was market leader with a 24% share, selling 5.95 MMt of fuel.

Petrol Ofisi has nearly 2,000 petrol stations, one mineral oil factory, 11 fuel and three liquid petroleum gas (LPG) terminals and more than 1.17 million cubic meters of storage capacity, according to its website.

Braskem cuts capex after fine hits earnings

MOSCOW (MRC) -- Brazil's Braskem SA is trimming investments this year as it winds down spending on a new plant in Mexico and cuts back strategic new projects after a bribery settlement hammered earnings last year, according to a Wednesday securities filing, said Reuters.

Latin America's largest petrochemical company plans to invest USD586 million in 2017, down from 2.975 billion reais invested last year, including 1.195 billion reais to Mexico's Ethylene XXI.

Unaudited year-end results released on Wednesday showed a fourth-quarter net loss of 2.637 billion reais, down from a net profit of 35 million reais a year earlier, due to fines of roughly 3 billion reais in a huge graft settlement.

Braskem and shareholder Odebrecht SA agreed in December to the largest penalty ever in an international bribery case, resolving an investigation into political kickbacks at state oil company Petroleo Brasileiro SA.

The company said in the filing on Wednesday that it had pushed back a deadline for auditing its 2016 earnings until March 29, due to additional work improving internal controls after the accord with Swiss, US and Brazilian authorities.

Excluding the impact of the fine, earnings before interest, taxes, depreciation and amortization, a gauge of operating profit known as EBITDA, rose 10% to 2.385 billion reais. The Mexican plant boosted the contribution of operations outside Brazil to 29% of EBITDA, from 12% a year ago.

"The challenges to the macroeconomic outlook in 2016 remain present in 2017," the company said in its earnings release, a reference to a deep two-year downturn for the Brazilian economy.

Braskem said it expected new polyethylene capacity in the United States to come online in late 2017 and 2018, pressuring the profitability of polyethylene globally, which should recover starting in 2019.

The spreads for other plastic resin prices over the cost of their raw materials should be more stable, Braskem said, especially in the US polyproylene market, where no new capacity is expected until the end of the decade.

As MRC informed earlier, in April 2016, Braskem Idesa started polyethylene (PE) production at its Coatzacoalcos, Mexico complex on 6 April.

Braskem S.A. produces petrochemicals and generates electricity. The сompany produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).