PetroVietnam, SCG begin construction on USD5.4bn Long Son Petrochemical in Vietnam

MOSCOW (MRC) -- Vietnam's state-owned oil and gas firm PetroVietnam and Thailand’s Siam Cement Group (SCG) have commenced construction on the USD5.4bn Long Son Petrochemical (LSP) Complex in the southern province of Ba Ria-Vung Tau, Vietnam, as per Refiningandpetrochemicals.

The project is being developed through the Long Son Petrochemical, a joint venture between SCG and PetroVietnam. Planned to be completed in 2022, the complex will have capacity of 1.6 million tons of olefin per year. It is expected to contribute about USD60m to the provincial and the state budget annually.

SCG Roongrote Rangsiyopash president and CEO said: "SCG believes that the project will encourage the long-term investment in related industries throughout the value chain as well as improving competitive standard of products that will lessen the need of importing petrochemical products."

The project is expected to create around 20,000 jobs during construction phase and a further 1,000 technical jobs once commissioned.

Vung Tau People’s committee chairman Nguy'n Van Trinh was quoted by Viet Nam News as saying: “After beginning operation, the project will have a great impact on the development of the petrochemical industry and downstream businesses, such as automobiles, electronics, electrical equipment, packaging and other services of the province."

The complex will be equipped to produce petrochemical products, including materials for plastics with the capacity of more than 2 million tons per year.

Vietnamese Prime Minister Nguyen Xuan Phuc was reported by Vietnam Investment Review as saying: “The Vietnamese government commits to facilitating this project, which is very important not only to the national economy, but also for the strategic relation between the two countries of Vietnam and Thailand."

Recently, SCG has awarded a contract to SK E&C and TechnipFMC for the construction of the Long Son Petrochemical complex.

Under the USD2bn contract, TechnipFMC and SK E&C will provide basic design, detailed design, procurement, construction, and commissioning services for a new 950,000-tonne/year ethylene plant, which will be the largest plant at petrochemical complex, reported Oil & Gas Journal earlier.

Valero to purchase SemLogistics Milford Haven fuel storage facility

MOSCOW (MRC) -- Valero Logistics UK Ltd, a subsidiary of Valero Energy Corporation and SemGroup Europe Holding L.L.C., a SemGroup Corporation company, have signed an agreement for the purchase of SemLogistics Milford Haven fuel storage facility on the west coast of Wales, as per Hydrocarbonprocessing.

Situated across the Haven from Valero’s refinery at Pembroke, the facility is one of the largest petroleum products storage facility in the United Kingdom (UK) with 8.5 million barrels of capacity for storing gasoline, gasoline blendstocks, naphtha, jet fuel, gas oil, diesel, and crude oil.

Over 67 percent of the storage capacity is multiproduct or dual purpose, giving Valero the flexibility to meet customers’ demands in the UK and throughout Northwest Europe. Additionally, Milford Haven will continue to operate as a third-party storage facility, offering storage options for third-party customers across the European petroleum markets.

"This facility complements our Pembroke refinery and fuel terminals in the UK and Ireland making it a natural fit for the company," said Joe Gorder, Valero Chairman, President and Chief Executive Officer. "This purchase demonstrates Valero’s commitment to Wales and the UK, and it aligns with our strategy to grow the logistics business and reduce secondary costs," added Gorder.

Subject to customary regulatory approvals, Valero expects the purchase to be completed in the third quarter of 2018. Valero also expects to retain the UK employees currently engaged in the business to be acquired.

Saint-Gobain Performance Plastics acquires composite materials maker HyComp

MOSCOW (MRC) -- The Performance Plastics business of Saint-Gobain has acquired HyComp LLC, an Ohio-based manufacturer of advanced proprietary components for the aerospace and industrial markets, as per Canplastics.

The terms of the deal have not been disclosed. Founded in 1986, HyComp operates from a single location in Cleveland where it has approximately 120 employees. In a statement, Saint-Gobain Performance Plastics described HyComp as a “leading supplier” of composite components made with proprietary carbon fibres and thermoplastic materials, used in applications such as actuation and electric systems on aircraft, as well as wear rings and air rotary valves for the canning and rolling mills markets.

"HyComp’s joining Saint-Gobain gives us the opportunity to broaden our portfolio of critical parts for high-temperature and long-life applications in aerospace and industrial applications,” said Jean Angus, general manager of Saint-Gobain Performance Plastics’ seals division. “The HyComp management team’s years of experience will help us to continue to make a material difference for our customers. The operation’s design, engineering, and quality control processes, coupled with pioneering, advanced thermoplastic and thermoset manufacturing capabilities, have provided customers with unique, complex parts critical for demanding applications over the years. It’s a perfect fit for Saint-Gobain."

Also headquartered in Ohio, Saint-Gobain Performance Plastics has about 6,500 employees across 58 manufacturing sites. The business is part of building materials company Saint-Gobain, which is based in France and had about US$46 billion in global sales in 2017. In Canada and the U.S., Saint-Gobain has approximately 150 locations and more than 15,000 employees, and reported sales of approximately USD6 billion in 2017.

Glencore deal gives hope for Djarmaya refinery

MOSCOW (MRC) -- Chad’s Djarmaya refinery stands to benefit following the resurrection of a deal last week between the government and oil trading house Glencore, as per Yourpetrochemicalnews.

The 20,000 bpd facility is the country’s sole refinery and is located 40 km north of the capital N’Djamena. Glencore made an oil-backed US$1.4 billion loan in 2014, under which it would offtake output from the landlocked state.

However, oil prices fell dramatically soon after, putting pressure on oil-dependent Chad and slowing down deliveries. Glencore owns stakes in the operational Mangara and Badila oilfields, giving the company a producing entitlement output of 2.52 million barrels in 2017, down 35% from 3.88 million barrels in 2016.

The slide in production reflected disagreements among the parties over how to amend the deal in the wake of substantially altered market conditions. The deal was criticised by the International Monetary Fund (IMF) in 2017 for having vague terms with regard to loan repayments.

However, it emerged again last week after protracted negotiations, and, eased by a recovery of global oil prices, that new terms have been approved. These include a lengthening of the tenor of the loan from Glencore, originally set for 2022, until 2030, and a reduction of the applicable interest rate from LIBOR plus 7.5% to a more manageable LIBOR plus 2%.

Alongside the more favourable terms for Chad, assurances have been made that secure oil supplies will be made to the Djarmaya facility, which produces diesel, gasoline and kerosene.

This amendment is designed to ensure that the refinery’s oil supplies are guaranteed and have no risk of being relegated to secondary status in competition with the export market. This will be particularly important if global crude oil prices continue to recover.

Djarmaya has a volatile history, with 60% shareholder China National Petroleum Corp. (CNPC) becoming embroiled in disputes with Chadian authorities over pricing of oil products output. The plant, which cost US$758 million to complete in 2011, provides valuable fuel supplies in the north of the country, and is connected with the southern Mimosa and Ronier oilfields via pipeline.

It was closed twice in 2011 and 2013 as a result of the disagreements. However, CNPC has remained a shareholder in the plant, and despite its problems, the refinery is to some extent regarded as a model of collaboration, with Ugandan officials paying it a visit in the process of their studies to develop a new oil refinery at Hoima.

The Chinese operator will be greatly encouraged that security of supplies to the refinery form part of the revised agreement, as this supports the predictability of the plant’s operational status.

BASF expects profit gain on specialty chemicals rebound

MOSCOW (MRC) -- Germany's BASF said it was aiming for a gain of up to 10 percent in group operating profit this year as it bets on a rebound in specialty chemicals to offset an expected weaker performance in basic petrochemicals, reported Reuters.

The chemicals maker is coming off a strong year where supply bottlenecks and strong demand across the petrochemicals industry boosted earnings.

Its basic chemicals unit saw earnings before interest and tax (EBIT) adjusted for one-off items surge by 67 percent in the fourth quarter, the company said on Tuesday.

However, it expects adjusted EBIT at the unit to drop by 11 percent or more in 2018, it said.

That forecast, combined with a proposed annual dividend of 3.10 euros per share which fell short of expectations, saw BASF shares fall 1.6 percent to 87.44 euros as of 1128 GMT, making them the third-worst performer on Germany's blue-chip DAX index.

BASF, which last month reported a 2017 operating profit up 32 percent, issued divisional results on Tuesday which showed that specialty products, something the company is looking to for growth, underperformed.

Morgan Stanley analysts said its performance in specialty products was "a little disappointing".

Helping, however, were profit margins at its commodity chemicals unit which rose to close to 26 percent of sales in 2017, almost double their average over the previous five years, mirroring similar developments at rivals such as Covestro.

BASF and its rivals are ramping up output capacity, most notably for chemicals used in building insulation or furniture, which will likely ease supply shortages.

BASF also aims to overcome the weakness at its advanced and customised products, such as food nutrients, ingredients for household products or engineering plastics.

"The downstream segments in 2018 clearly need to improve their performance," said Kepler Cheuvreux analyst Christian Faitz.

BASF also said its Wintershall oil and gas division, which it is seeking to merge with Russian billionaire Mikhail Fridman's DEA, should help raise profits this year helped by a strong oil price.

As MRC informed previously, in December 2017, BASF’s Coatings division inaugurated a new automotive coatings plant at its Bangpoo manufacturing site, Samutprakarn province, Thailand. The new plant is the first BASF automotive coatings manufacturing facility in ASEAN, and will produce solventborne and waterborne automotive coatings to meet growing market demand in the region.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries. BASF generated sales of about EUR58 billion in 2016.