ADNOC targets growing polymers market from China’s auto, infrastructure sectors

MOSCOW (MRC) – The Abu Dhabi National Oil Company (ADNOC) is targeting rapid growth in demand for its polymer products from China’s automotive industry and the country’s investment in gas and electricity infrastructure, said
the company on its web-site.

ADNOC is focused on market expansion in China and Asia, where demand for petrochemicals and plastics, including light-weight automotive components, essential utility piping and cable insulation, is forecast to double by 2040.

"The push is part of ADNOC’s overall 2030 strategy aimed at a more profitable upstream, more valuable downstream, more sustainable, economic gas supply and world class talent,” The company said in a press release. “Expansion in China and Asia is a critical component of this strategy, particularly when it comes to maximizing value from downstream operations."

In response to Asia’s increasing demand for higher value products, ADNOC will ramp up its petrochemical capacity from 4.5 MMtpy in 2016 to 11.4 MMtpy by 2025.

Meanwhile, earlier this year, ADNOC strengthened its relationship with China’s hydrocarbons sector, when it finalized oil concession partnership agreements with the China National Petroleum Company (CNPC) and CEFC China Energy Company Limited (CEFC China).
MRC

AkzoNobel rejects third takeover bid from PPG worth USD29 bln

MOSCOW (MRC) -- Dutch industrial paints and chemicals company AkzoNobel has rejected a third unsolicited takeover bid from American rival PPG Industries, worth USD28.8 billion, saying it was not in the interests of shareholders, reported ABS News.

"The PPG proposal undervalues AkzoNobel, contains significant risks and uncertainties, makes no substantive commitments to stakeholders and demonstrates a lack of cultural understanding," AkzoNobel CEO Ton Buchner said in a statement.

AkzoNobel said that its own plan, announced last month, to spin off its Specialty Chemicals unit within 12 months to boost growth "offers a superior route to growth and long-term value creation and is in the best interests of shareholders and all other stakeholders."

AkzoNobel announced the shakeup after rejecting two earlier PPG bids, saying they undervalued the company.

Last month, PPG Industries upped the ante again with a third bid for AkzoNobel; a cash-and-stock deal valued at about USD28.8 billion.

AkzoNobel said it rejected the latest offer after "considerable in-depth analysis" including talks with PPG's CEO, Michael McGarry.

PPG said in a statement posted on its website that it was disappointed by the latest rejection and added that the talks, held in Rotterdam, lasted less than 90 minutes.

PPG said that Buchner and AkzoNobel's supervisory board chairman Antony Burgmans opened the meeting by saying "that they did not have the intent nor the authority to negotiate" and refused to discuss AkzoNobel's restructuring plan.

PPG said it believes that its bid "is vastly superior in shareholder value creation and provides more certainty to employees and pensioners than AkzoNobel's recently announced new standalone plan."

As MRC wrote before, AkzoNobel said on 9 June 2016 that it was adding marine and protective coatings capacity at its existing performance coatings site at Lipetsk, south of Moscow. The new capacity was expected to be operational in the third quarter of last year. It will enable AkzoNobel to supply protective coatings for the regional oil and gas, mining, power and infrastructure markets, as well as marine coatings for ship building, maintenance and repair. The investment represents a further expansion for the multi-business site at Lipetsk.

Akzo Nobel N.V., trading as AkzoNobel, is a Dutch multinational, active in the fields of decorative paints, performance coatings and specialty chemicals. Headquartered in Amsterdam, the company has activities in more than 80 countries, and employs approximately 55,000 people.
MRC

India BPCL revises naphtha export pricing, adds Argus quotes

MOSCOW (MRC) -- India's state-run Bharat Petroleum Corp Ltd is revising the formula it uses to price naphtha exports to include the mean prices from Argus Media instead of only relying on S&P Global Platts, a tender document showed, said Reuters.

"BPCL is doing this on an experimental basis," said a source familiar with the matter. The refiner may extend the formula of using a mean of Platts and Argus prices to other products if the naphtha pricing is well received by traders, said the source, who asked not to be identified.

BPCL regularly exports naphtha and fuel oil due to excess volumes, but only ships diesel on rare occasions. BPCL has made the pricing changes in its latest naphtha tender, which closes on May 16. The refiner is looking to sell 33 Mt of naphtha for June 4–6 loading from Mumbai and another 55 Mt for June 10-12 loading from the southwestern port of Kochi.

BPCL did not make immediate comment on the issue. The company on May 4 sold a cargo from Kochi to PetroChina at premiums of about USD16 to USD17 to Platts Middle East price formula on a free-on-board (FOB) basis.

BPCL joins Indian Oil Corp, which is also using both Platts and Argus prices in their spot sales. Other Indian sellers such as Mangalore Refinery Petrochemicals Ltd, Oil & Natural Gas Corp, Reliance Industries and Hindustan Petroleum Corp Ltd are using only Platts prices.

Three traders said Argus prices are usually slightly higher than those of Platts. "Buyers will accept the change as the impact is not major as buyers could place a slightly lower bid factoring in that Argus prices may be higher," said a buyer of Indian naphtha cargoes.
MRC

Honeywell awarded contract by Dangote Oil for critical equipment, technology licensing and design service

MOSCOW (MRC) -- UOP LLC, a division of Honeywell International Inc. has won a contract from Dangote Oil Refinery Company Ltd. for critical equipment, technology licensing and design services for a world-scale integrated refinery and petrochemical plant, as per Plastemart.

When completed, the integrated complex in Lekki, near the capital of Lagos in Nigeria, will be the largest single-train refinery in the world. Included in the agreement is proprietary specialist equipment required for UOP LLC's licensed RFCC, Unicracking, CCR Platforming, Penex and Butamer processes, which provide superior performance and economics, as well as high-quality packaged equipment for faster, more reliable construction than field-built plants.
The proprietary specialist equipment includes catalyst regeneration and dryer regeneration control systems, high-performance column trays, and heat exchanger tubes. The high-quality packaged equipment includes a modular CCR unit, catalyst coolers, a Third-Stage Separator System for the RFCC unit - which upgrades heavy oil - and two pressure swing adsorption (PSA) units to purify hydrogen.

"Nigeria has the second-largest proven oil reserves in Africa - more than 37 billion barrels - but currently imports most of its refined products because it has limited domestic refining capacity," said Mike Millard, vice president and general manager of UOP LLC's Process Technology & Equipment business. "This new refinery will help Nigeria meet its own growing demand for fuels and petrochemicals while raising the profitability of the nation's crude oil."

The Lekki facility will be the largest single-train refinery in the world producing Euro-V quality gasoline and diesel as well as jet fuel meeting international aviation specifications along with world-scale quantities of polypropylene, a primary component used in plastics and packaging. The plant's RFCC unit will be the largest in the world. According to the U.S. Energy Information Administration, Nigeria in 2015 produced 2.3 mln bpd of petroleum and other liquids, about 2 mln of which was exported. That same year, Nigeria relied on imports of refined fuels to meet more than 70% of its domestic needs.

As MRC informed earlier, in March 2017, Honeywell announced that Jiangsu Sailboat Petrochemical Company, Ltd. had started its UOP Advanced Methanol-to-Olefins (MTO) unit during a 10-day test to confirm successful operation. 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.

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.
MRC

BASF sees role of oil and gas unit declining further

MOSCOW (MRC) -- BASF, the world's largest chemicals maker, said its focus would be on boosting profitability at its chemicals and crop protection businesses as the contribution to earnings from oil and gas, hurt by low crude oil prices, diminishes further, said the company.

The company, whose products include catalytic converters, vitamins, foam chemicals and engineering plastics, would continue to buy businesses and sell non-core activities to boost growth and earnings stability, Chief Executive Kurt Bock told shareholders at the group's annual general meeting on Friday.

"Traditionally, the Oil & Gas segment has accounted for around 25% of EBIT before depreciation and amortization, but in 2016 this figure was just 15%," Bock said.

"It is therefore even more important to improve the profitability of our chemicals and crop protection businesses year after year. In recent years, we have managed to do this by an average of around 5 percent annually," he added.

Bock said the Wintershall oil and gas unit, a subsidiary since 1969, remained a core activity, however. "We cannot see at all at the moment that oil and gas would not be a good part of the portfolio," Bock said.

Much of last year's decline in group sales by about 13 B euros to $63 B was due to a transfer of BASF's gas trading and storage business to Gazprom.

That was part of an asset swap under which BASF took a bigger stake in some of Gazprom's Siberian gas fields that will not start production until next year.

Bock said he will still look at takeover targets for BASF's crop protection unit, even though asset prices had increased "dramatically" over the past few years.

Rival Bayer said this week it would sell its Liberty herbicide and Liberty Link-branded seeds businesses to win antitrust approval for its acquisition of Monsanto, the biggest chunk of expected asset sales worth about USD2.5 B.

BASF is seen as a suitor, after missing out on antitrust-related selloffs by prospective merger partners DuPont and Dow chemical.
MRC