China to invest in Aktyubinsk region in Kazakhstan

MOSCOW (MRC) -- Chinese corporation Tianjin Bohua Petrochemical will invest USD 4 billion in the construction of a factory which is expected to produce polyethylene and polypropylene from natural gas in the Aktyubinsk region of Kazakhstan, as per GV.

The memorandum of cooperation was signed within the framework of the working visit of the Akim of Aktobe region Berdybek Saparbayev to Beijing.

The project is planned to be implemented in two stages - the production of 1.8 million tons of methanol from natural gas with two complex installations a year, as well as 300,000 tons of ethylene, 300,000 tons of polyethylene and 300,000 tons of polypropylene with two complex installations per year.

The construction of the plant will create 3,000 new jobs. The main markets will be China and Kazakhstan. The products can also be supplied to neighboring countries.

Saparbayev and President of Tianjin Bohua Petrochemical (a subsidiary of Tianjin Bohai Chemical Industry Group) Zhou Kai discussed the training of Kazakh personnel in the framework of the project, the use of new technologies, the provision of natural gas and electricity required for the production process, as well as compliance with the environmental legislation of Kazakhstan.

The project is planned to be implemented within two to three years after the preparatory work.

As MRC wrote previously, in early 2016, South Korea's LG Chem said it had decided to drop a plan to jointly build a USD4.2-billion petrochemical complex in Kazakhstan, citing a prolonged slump in oil prices and a sharp increase in facility investments. In 2011, the chemical company said it would construct the complex near the western Kazakh city of Atyrau as part of a 50-50 joint venture with two Kazakh companies. The plan involved building ethylene and polyethylene plants with annual capacities of 840,000 tonnes and 800,000 tonnes.
MRC

MOSCOW (MRC) -- Dow Polyurethanes, a business unit of DowDuPont Materials Science, has started up two new prepolymers reactors at its largest PU System House in Ahlen, Germany, as per GV.

According to Dow, with this focused investment the company adds production capacity to its network of Systems Houses around the world, and strengthens its position as a supplier of customised polyurethane solutions to the growing industrial and infrastructure markets.

"Dow continues to see growth of innovative polyurethane solutions for industrial and infrastructure markets," commented Jon Penrice, Vice President Dow Polyurethanes Europe, Middle East, Africa and India (EMEAI). "This latest expansion of our world-class capabilities represents another significant milestone in Dow’s commitment to invest to support our customers’ growth and their strong demand for tailored formulations and fast response time."

"The design of the new reactor capitalises on Dow’s years of experience and advanced prepolymer production technologies," explained Lorenzo Nicolini, Product Manager (Systems), Dow Polyurethanes EMEAI. "The result is a high-productivity reactor which is fully automated including raw materials integration and packaging, delivering an efficient and safe production of consistent and high quality prepolymers."

Dow is a leading provider of polyurethane solutions to the industry with a global network of system houses. These facilities provide capabilities in which raw materials can be blended to deliver tailored polyurethane systems for the most demanding applications, while also improving the speed of application development and service to customer. In addition, Dow also operates a network of Polyurethane Service Centers globally that will provide customers access to laboratory capabilities and tailored technical service - including product demonstrations, prototype development and mechanical testing of final materials. The most recent one was opened in Brasov Romania earlier in 2017.

Thus, as MRC wrote before, this summer, Dow Polyurethanes announced the opening of a new Polyurethanes Service Center in Romania, expanding its network of more than 20 sites for production, development and technical service across the EMEAI region.

The Dow Chemical Company is an American multinational chemical corporation. Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber.
MRC

MOSCOW (MRC) — ABB will reshape its engineering, procurement and construction (EPC) business—including its biggest but least profitable power grids division—by spinning off and winding down some operations, triggering fourth-quarter charges totaling USD225 MM, as per Hydrocarbonprocessing.

Chief Executive Ulrich Spiesshofer called the move ABB's final step in a year of transition that would lead into a 2018 when it would benefit from a strengthening economy. "We will always run the business in a way that we are responsibly managing capacity in line with market development," he told reporters on a call, but noted economic conditions were likely to be brighter next year than in 2017.

Last month, ABB said it would revamp its global power grids operations as it responds to the division's sluggish profitability and falling orders. The move came as ABB sought to justify its decision last year to reject calls from Cevian Capital, its second-largest shareholder, to spin off power grids, which has suffered a 9% drop in orders in 2017.

In the Power Grids division, which also makes electrical substations, ABB will form a joint venture with SNC-Lavalin for electrical substation EPC projects, the Swiss technology group said on Wednesday. Canadian-based SNC-Lavalin will have the controlling interest in the venture, it said.

In the Industrial Automation division, ABB's oil & gas EPC business will be transferred into a previously announced joint venture controlled by Saudi-based Arkad Engineering and Construction Ltd in a deal now expected to close this month. In the Robotics and Motion division, ABB is winding down its turnkey full train retrofit business.

"The fourth quarter 2017 results of Power Grids and Robotics and Motion are each expected to be impacted by approximately $75 MM on operational EBITA. The transfer of the turnkey oil & gas EPC business into the JV with Arkad is expected to result in a non-operational pre-tax charge to net income of approximately USD75 MM," the company said.

Spiesshofer said he did not expect negative impact on jobs. ABB is trying to shift its focus to higher-margin services.

Its four divisions cover electrification products, robotics, industrial automation and power grids. Power grids accounted for around 30% of 2016 sales, electrification products 28%, robotics 23% and industrial automation 19%.

ABB shares fell 0.4% in early trading, while the Stoxx European industry sector index was little changed. "We believe that the indicated completion of the (EPC) business model change will be supportive for sales growth rates as well as profitability," Baader Helvea analyst Guenter Hollfelder, who rates the stock "hold," said in a note.

ABB will report these businesses as a non-core operating unit which will manage its backlog of existing business. The new unit will report to finance chief Timo Ihamuotila from the start of next year.

MRC

MOSCOW (MRC) -- Oil edged lower towards USD65/bbl on Tuesday, but remained within sight of its highest level since mid-2015, as the looming restart of a North Sea oil pipeline offset support from OPEC-led supply cuts, said Hydrocarbonprocessing.

The North Sea Forties pipeline, which plays an important role in the global oil market, is being tested following repairs and full flows should resume in early January, its operator Ineos said on Monday. Brent crude, the international benchmark for oil prices, slipped 15 cents to USD65.10 a barrel at 1153 GMT. Prices hit USD65.83 on Dec. 12, the highest since June 2015. US crude was down 7 cents at USD58.40.

"The confirmation that Forties is coming back is the main development of the long weekend," said Olivier Jakob, analyst at Petromatrix. "For sure it has the potential for capping Brent." Trading activity was thin due to the ongoing Christmas holiday in many countries.

Brent has risen 17% in 2017. The Organization of the Petroleum Exporting Countries, plus Russia and other non-members, have been withholding output since Jan. 1 to get rid of a glut. The producers have extended the supply cut agreement to cover all of 2018.

Iraq's oil minister said on Monday there would be a balance between supply and demand by the first quarter, leading to a boost in prices. Global oil inventories have decreased to an acceptable level, he added. That's earlier than seen by OPEC's latest official forecast, which calls for a balanced market by late 2018.

While the OPEC action has lent support to prices all year, the unplanned shutdown of the Forties pipeline on Dec. 11 pushed Brent to its mid-2015 high. Forties plays an important role in the global market as it is the biggest of the five North Sea crude streams underpinning Brent, the benchmark for oil trading in Europe, the Middle East, Africa and Asia.

Rising production in the United States is offsetting some of the OPEC-led cuts. The US rig count, an early indicator of future output, held at 747 in the week to Dec. 22, according to the latest weekly report by Baker Hughes.
MRC

MOSCOW (MRC) -- LG Chem Ltd, South Korea’s largest chemical company, said on Tuesday it will spend USD278.32 MM on expanding its acrylic acid and superabsorbent polymer production capacity by the first half of 2019, as per the company's press release.

The company said in a statement that the investment aims to focus on boosting its higher-value petrochemical business.

The expansion will increase the production capacity of its plants in the southwestern city of Yeosu by 180,000 tpy of crude acrylic acid to 700,000 tpy, and by 100,000 tpy of super absorbent polymer to 500,000 tpy, LG Chem said.

Crude acrylic acid is a feedstock for super absorbent polymer that is typically used to make diapers.

As MRC reported earlier, in January 2016, South Korea's LG Chem said it had decided to drop a plan to jointly build a USD4.2-billion petrochemical complex in Kazakhstan, citing a prolonged slump in oil prices and a sharp increase in facility investments. In 2011, the chemical company said it would construct the complex near the western Kazakh city of Atyrau as part of a 50-50 joint venture with two Kazakh companies. The plan involved building ethylene and polyethylene plants with annual capacities of 840,000 tonnes and 800,000 tonnes, respectively.

LG Chem Ltd., often referred to as LG Chemical, is the largest Korean chemical company and is headquartered in Seoul, South Korea. According to ICIS report, it is 15th biggest chemical company in the world in 2011. It has eight domestic factories and global network of 29 business locations in 15 countries. LG Chem is a manufacturer, supplier, and exporter of petrochemical goods, IT&E Materials and Energy Solutions.
MRC