USD2 bln petrochemical plant contract with European firms terminated in Bolivia amid corruption scandal

MOSCOW (MRC) -- ESPANOLA corruption scandal in Bolivia had led President Evo Morales to cancel two petrochemical plant contracts with two European companies, as per Plastemart.

The contract was cancelled after a complaint by Senator Oscar Ortiz, who accused the president and contract proceedings of corruption. As a result, Guillermo Acha - President of the country’s state owned oil company Yacimientos Petroliferos Fiscales Bolivianos - was dismissed.

A contract to purchase drilling equipment for USD149 million was reportedly mishandled. Officials decided to terminate the contracts before they were signed and finalized.

The construction of the propylene and polypropylene plant with the Italian company Tecnimont and its Spanish partner Tecnicas Reunidas, was to be the president’s biggest bid to industrialize natural gas, which is the country’s main source of wealth. It was the country’s largest contract, at USD2billion.

Ortiz said he wants to investigate why the Italian company had been awarded three contracts, the conceptual engineering study, the strategic support service and the engineering and construction project for the polypropylene (PP) and propylene plant.

We remind that, as MRC wrote before, Austrian chemical company Borealis is carrying out feasibility studies for a polypropylene (PP) unit and a mixed-feed steam cracker at Borouge, the petrochemicals complex it owns jointly with Abu Dhabi's state-owned Adnoc in Ruwais, UAE. The study for the new PP unit- known as PP5, is in its latter stages, with a final investment decision expected later this year. The new plant would have a production capacity of around 600,000 tpa. Abu Dhabi refiner Takreer is building a new 500,000 tpa propane dehydrogenation (PDH) unit at Ruwais that is planned to start up in the third quarter of this year. This will create a significant excess of propylene in the complex that would easily support a new PP plant, Borealis chief executive Mark Garrett said in March 2017.
MRC

MOSCOW (MRC) - July contract price of ethylene in Europe was agreed at EUR50/tonne below the level of June.
But European polyethylene (PE) producers reduced their export prices more significantly that the amount of reduction of ethylene prices, according to ICIS-MRC Price Report.

Negotiations over export prices of European PE to be shipped to the CIS markets began back last week. Many negotiators said most European producers had reduced substantially their export PE prices. In some cases, the price decrease reached EUR70/tonne from May.

Deals for July shipments of high density polyethylene (HDPE) were discussed in the range EUR950-1,030/tonne FCA, whereas last month's deals were done in the range of EUR1,000-1,100/tonne FCA. Some companies reported that they have achieved prices at the level of EUR920/tonne FCA, but this was more likely an exception.

July deals for low density polyethylene (LDPE) were negotiated in the range of EUR1,080 - 1,150/tonne FCA, whereas last month's deals were done in the range of EUR1,130 - 1,210/tonne FCA.
MRC

MOSCOW (MRC) -- PTT Global Chemical (PTTGC) has commenced production of linear low density polyethylene (LLDPE) early this week, as per Apic-online.

A Polymerupdate source in Thailand informed that the company has started production of LLDPE from July 11, 2017. The LLDPE production was halted for around 3 weeks, during this period, the company was producing metallocene linear low density polyethylene (MLLDPE).

Located at Map Ta Phut in Thailand, the plant has a LLDPE production capacity of 400,000 mt/year.

As MRC reported earlier, on 3 April, 2016, PTTGC restarted LLDPE plant, following a maintenance turnaround. The plant was shut for maintenance in early-March 2016. Located at Map Ta Phut in Thailand, the LLDPE plant has a production capacity of 400,000 mt/year.

We also remind that PTT is on track to start commercial operations at its new 400,000 mt/year metallocene C6 linear low density polyethylene plant at Map Ta Phut, Thailand, in the first quarter of 2018. PTT will start up the plant by the end of this year.

PTT Global Chemical is a leading player in the petrochemical industry and owns several petrochemical facilities with a combined capacity of 8.45 million tonnes a year.
MRC

MOSCOW (MRC) — Shares of Lotte Chemical Titan Holding Bhd fell in their Malaysian stock market debut, a further indication of weak investor demand after the size of its offering was slashed by a fifth last week, said Reuters.

While the USD879 MM flotation by the integrated petrochemical producer was still the largest in Malaysia in five years, its lacklustre debut may cast a shadow on the other listings lined up for the year.

Lotte Chemical Titan, part of the South Korean conglomerate Lotte Group, fell 1.8% to end at 6.38 ringgit on its first day of trade, giving it a market value of 14.7 B ringgit (USD3.4 B).

The company last week had to cut the size of its offering after its books were undersubscribed and its shares later priced at the bottom of their indicative price range of 6.50–8.00 ringgit per share.

"The lacklustre performance of the stock is from the revision of the final retail price ... creating a negative perception that the stock's growth was fully priced in previously," said Mabel Tan, a Public Investment Bank analyst.

Tan said Lotte Chemical Titan's valuation was now attractive as it was cheaper than its peers. It is trading at around 10 times its forward price-to-earnings ratio, compared to its regional peers' average of 12.2, she added.

"The proceeds raised from our IPO will be used to drive our expansion plan in the ASEAN region to further improve operations and capacity," said Lotte Chemical Titan CEO Lee Dong Woo said.

The funds would be used to construct a polypropylene plant in the southern Malaysian state of Johor, develop an integrated petrochemical facility in Indonesia and upgrade the company's existing naphtha cracker, he added.

In contrast to Lotte Chemical Titan's weak debut, rival Petronas Chemicals, with a market value of about 55 B ringgit, rose 1.5% on Tuesday.

Poor market conditions, weak oil prices and a volatile ringgit have been a deterrent for IPOs in recent years, but the Malaysian market has seen a revival of sorts with several offerings planned for the year.

Other IPOs reportedly in the pipeline for this year include fast food operator QSR Brands, which is looking to raise about USD500 MM, and Edra Energy which is targeting USD500 MM to USD1 B.

Lotte Chemical Titan had originally planned the IPO for last year but postponed it after South Korean authorities began investigating Lotte Group for alleged wrongdoing.

As MRC informed earlier, Lotte Chemical Titan plans to start construction of a USD4 bln naphtha cracker plant in Indonesia next year.

The Lotte Group currently has a presence in Indonesia via its subsidiary, Honam Petrochemicals, which acquired Malaysia’s polyolefin major Titan Chemicals in July 2010. Included in the acquisition was Titan’s Indonesian subsidiary - PT Titan Petrokimia Nusantara (TPN), which has a polyethylene (PE) production capacity of 450,000 tonnes/year.

MRC

MOSCOW (MRC) -- Coca-Cola European Partners (CCEP) has unveiled its new GB sustainable packaging strategy – to double the amount of recycled plastic in all of its bottles to 50% by 2020, said Packagingnews.

The move to boost the recycled content of plastic bottles is part of a new sustainable packaging strategy by the US company.

It also announced that it will be investing in marketing and advertising to promote recycling.

Coca-Cola has been the target of a global campaign by Greenpeace urging it to ditch "throwaway plastic".
The environmental group has been campaigning against the amount of plastic pollution found in the ocean.

"Millions of tonnes of plastics are ending up in the ocean every year, harming marine wildlife, taking centuries to break down and spreading toxic chemicals," says Greenpeace.

Jon Woods, general manager of Coca-Cola Great Britain, said: "Our packaging is valuable to us and we don't want to see any of it end up where it shouldn't.

"All of our bottles and cans have been 100% recyclable for some time now, so in theory none should be littered. But we know that isn't happening and that's why we are going to do more."

As part of the company's new drive, the recycled bottles will be made up of plastic sourced from the UK.

Coca-Cola says that once bottles have been collected and recycled, they will return to shop shelves as part of new packs in six weeks.

As MRC informed earlier, in September 2014, Coca-Cola Company made an additional investment in the US-based Virent, which is developing its bio-based PX - BioFormPX. This investment will enable Virent to scale up separation and purification of BioFormPX material at their demonstration plant in Madison, Wisconsin.
MRC