Wacker breaks ground on new polymer powder plant in South Korea

MOSCOW (MRC) -- Wacker Chemie AG is expanding its existing production plants for dispersions and dispersible polymer powders in South Korea, as per the company's press release.

With the mayor of Ulsan Gi-Hyeon Kim and numerous customers in attendance, Wacker Executive Board member Dr. Christian Hartel, head of Wacker Polymers Peter Summo and head of Wacker Korea Dal-Ho Cho celebrated the official start of construction on the major project during a symbolic ground-breaking ceremony.

The Group is building a new spray dryer for dispersible polymer powders at its Ulsan site, which will have a total capacity of 80,000 metric tons per year. The Munich-based chemicals company is also constructing an additional reactor for dispersions based on vinyl acetate-ethylene copolymer (EVA), which are needed as the raw material for the spray dryer to produce dispersible polymer powders.

Ulsan’s plant complex, which covers the entire production chain from VAE dispersions to dispersible polymer powders, will be one of the largest of its kind in the world. Investments will total around EUR60 million and production is scheduled to start in the first quarter of 2019.

With the expansion, Wacker is meeting the increasing demand for its high-quality binders, which are particularly needed in the constantly growing construction industry in South Korea and Southeast Asia. "Our existing production facilities in Ulsan provide the ideal setting for the expansion. With this new capacity, we will be able to support our customers right across Asia in a more targeted way by offering them products tailored to their specific requirements," said Christian Hartel, the WACKER Executive Board member responsible for Asia, at the ground-breaking ceremony. According to him, the expansion will also guarantee shorter delivery routes and times.

"We can see that our construction polymers, in particular, which make resource-efficient housebuilding possible, are in demand in this region like never before,” added Peter Summo, head of WACKER POLYMERS, during the festivities. “With our investment, we are ensuring that we will be able to securely meet future market growth in the region, too."

As MRC wrote before, in 2013, Wacker Chemie AG officially launched its new production plant for EVA dispersions at its Ulsan site in South Korea. The additional 40,000 tonnes from the second reactor line increases the site's EVA-dispersion capacity to a total of 90,000 tonnes per year. The production capacity of the site had, thus, almost doubled, making the plant complex one of the biggest of its kind in South Korea.

Wacker Chemie AG is a worldwide operating company in the chemical business, founded 1914. The company is controlled by the Wacker-family holding more than 50 percent of the shares. The corporation is operating more than 25 production sites in Europe, Asia, and the Americas. The product range includes silicone rubbers, polymer products like ethylene vinyl acetate redispersible polymer powder, chemical materials, polysilicon and wafers for semiconductor industry.

Shell looks beyond road fuels to secure future of refining

MOSCOW (MRC) -- While the world braces for the electric-vehicle revolution, Royal Dutch Shell is betting on growing appetite for asphalt and plastics to sustain its century-old oil refining business for the coming decades, reported Reuters.

Converting crude oil into products ranging from gasoline to industrial chemicals has long faced obstacles due to volatile profits, high costs, safety issues and pollution and more recently, forecasts of peaking demand for oil.

But refining, together with trading, marketing and chemicals - known together as downstream - has proved its importance during the oil industry's downturn since 2014, providing the bulk of Shell's profits as the price of crude collapsed.

Shell has in recent years transformed its downstream business by selling some plants and upgrading others to have them better resist oil price fluctuations and shifts in demand, delivering double-digit returns on capital employed.

"Refining will continue to be part of our portfolio for decades to come," said Shell's head of manufacturing Lori Ryerkerk, who is in charge of refining.

Shell is perhaps the most aggressive in its sector in forecasting that the demand for gasoline could reach an apex by the 2030s as drivers shift to electric vehicles and traditional engines become more efficient.

But still, Shell says, the continued expansion of the world's economy, particularly in Asia, means consumption of other refined oil products and petrochemicals is likely to grow.

For instance, there are no economically viable substitutes for asphalt, needed to build roads, or for the polymers and chemicals used to produce plastics for cars, toys and clothes, Ryerkerk said.

"While the peak demand for our products will come, it won't come in decades. There are still many products that we make for which there is no other alternative at the moment - heavy transport, industrial applications that require high heat."

The Anglo-Dutch company plans to double the size of its chemicals business by the middle of the next decade with several new plants including in Louisiana and Pennsylvania that benefit from access to cheap shale gas, said Shell's head of chemicals, Graham van't Hoff.

It also wants 20% of sales from its fuel stations worldwide to come from recharging electric vehicles and low-carbon fuels by 2025.

The oil sector's outlook for growth in demand for oil and plastics could prove wrong if governments around the world introduce regulations to reduce fossil fuel consumption in their fight against pollution and global warming. A study published last week said a quarter of the world's oil refineries risk closure by 2035 if those targets are met.

Just as some countries such as China and India contemplate banning gasoline and diesel vehicles, rules to limit consumption of plastics such as bottles and bags could dampen demand, analysts said.

"Regulation is one of the biggest risks to the business," said Jason Kenney, head of European oil and gas equity research at Banco Santander.

Overcapacity is another danger as other companies including ExxonMobil and France's Total also expand into petrochemicals.

"Shell currently offers double-digit returns on capital employed from downstream and chemicals. But then you could have a flood of capacity and it will be a difficult sector to remain competitive for decades," Kenney said.

As MRC informed earlier, in October 2016, Royal Dutch Shell has signed a preliminary memorandum of understanding (MOU) with Iran’s National Petrochemical Co. (NPC) for cooperation in the petrochemical industry.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.

BP launches share buyback after Q3 earnings double

MOSCOW (MRC) -- BP launched a share buyback scheme in a sign of resurgent confidence in the oil and gas industry after announcing a doubling in third quarter earnings, said the Financial Times.

The UK group reported underlying profits on a replacement cost basis — the measure watched most closely by the market — of USD1.87bn, compared with USD933m in the same period last year. This was much better than the USD1.58bn consensus forecast by analysts, according to RBC Capital Markets.

Brent crude, the international benchmark, has climbed above USD60 per barrel in recent days for the first time since 2015, increasing momentum behind recovery from the deep downturn of the past three years.

BP said it was able to cover its organic capital expenditure and dividend in the first nine months of this year at an oil price of USD49 per barrel — reflecting deep cost cuts made since the 2014 oil market crash and highlighting the industry’s resurgent profitability.

This has given BP confidence to resume a share buyback programme to offset the dilutive impact of its scrip dividend programme, under which investors can choose to receive their payouts in shares rather than cash.

Oil and gas production averaged 3.6m barrels of oil equivalent a day in the third quarter, up 14 per cent from a year ago. BP has seen its biggest surge of production for years during 2017 after starting operations from several new projects. This is helping rebuild its production base after years of retrenchment since the costly Deepwater Horizon oil spill in the Gulf of Mexico.

SUEZ to build state-of-the-art laboratory in Texas to enhance innovation for O&G

MOSCOW (MRC) -- SUEZ broke ground on a new laboratory in Tomball, Texas, north of Houston, which is expected to open mid-2018, said Hydrocarbonprocessing.

In addition to continuing the research and development (R&D) of specialty chemicals for the industrial segment, the new facility will expand to include further process innovation in the oil and gas industry, focusing on global upstream and downstream applications.

The new laboratory also will provide industrial water, oil, microbiological, deposit and metallurgical failure testing to support SUEZ’s customers. In addition, the site will have an advanced technical training center for engineers and scientists—both internal and customer-oriented.

The facility design is modular—allowing for rapid and efficient lab adaptation to changing priorities and customer-specific projects. Currently designed for more than 80 researchers and support staff, additional support facilities have been engineered in place at the design phase, allowing for efficient and cost-effective future expansion.

For the oil and gas industry, customized experimental simulation capabilities that closely mimic the field environment are being added and upgraded. New research and application development efforts will continue in process and water chemistry for oil and gas production, transport, refining and petrochemicals, emphasizing all unit operation support, failure and root-cause analyses. It also will allow for expert services and application technology as well as a new emphasis on sensors, monitoring solutions and digital domain to further advance our process-focused solutions.

South Africas petrol, diesel prices to increase in November

MOSCOW (MRC) --The retail price of petrol and the wholesale price of diesel in South Africa will increase from Wednesday due to a weakening of the rand against the dollar, as per Reuters.

The price of petrol will rise by 4 cents to 14.05 rand per liter in the commercial hub of Gauteng province, while that of diesel will go up by 23 cents to 12.35 rand.