Sempra Energy-Total sign MoU on NA LNG projects

MOSCOW (MRC) -- Sempra Energy and Total S.A. have announced that they have entered into a Memorandum of Understanding (MOU) that provides the framework for cooperation in the development of North American liquefied natural gas (LNG) export projects, according to Hydrocarbonprocessing.

The scope of the MOU covers continuing development of the Cameron LNG liquefaction-export project in Louisiana and Energia Costa Azul (ECA) liquefaction-export project in Baja California, Mexico.

The MOU between Sempra Energy and Total contemplates Total potentially contracting for approximately up to 9 million tonnes per annum (Mtpa) of LNG offtake across Sempra Energy's LNG export development projects on the U.S. Gulf Coast and West Coast of North America, specifically Cameron LNG Phase 2 and ECA LNG. Total, which already is a partner in the Cameron LNG joint venture with a 16.6-percent stake, also may acquire an equity interest in ECA LNG.

"The US is increasing its global leadership position in the production of oil and natural gas," said Jeffrey W. Martin, CEO of Sempra Energy. "In large measure, the next step in fulfilling our country's energy potential is the development of critical export infrastructure for LNG. Sempra Energy has a long-term goal of developing more than 45 Mtpa of LNG export capacity in North America. That is why our relationship with Total is so important. We plan to leverage the competitive strengths of both companies to accelerate development of North American LNG exports to global markets."

"This relationship with Sempra Energy will support our goal of building a diverse portfolio of LNG supply options that offers our customers flexibility, reliability and low-cost North American natural gas," said Patrick Pouyanne, chairman and CEO of Total S.A. "We are pleased to collaborate with Sempra Energy and the other Cameron LNG co-owners to extend the Cameron LNG project and to further enhance its competitiveness, but also participate in the development of export capacity on the West Coast of Mexico, which will benefit from synergies with existing infrastructure and from a significant shipping cost advantage for customers in Asia."

The USD10 billion Phase 1 of the Cameron LNG joint-venture liquefaction-export project includes three liquefaction trains with approximately 14 Mtpa of export capacity under construction in Louisiana. Commissioning of the first train is now under way and all three trains are expected to be producing LNG in 2019. Phase 2 of the Cameron LNG project, previously authorized by the Federal Energy Regulatory Commission and being developed jointly by the Cameron LNG co-owners, encompasses up to two additional liquefaction trains and up to two additional LNG storage tanks with approximately 9 Mtpa of capacity.

ECA Phase 1 is a one-train facility with an expected total export capacity of 2.5 Mtpa, utilizing the existing LNG receipt terminal's tanks, loading arms and berth. ECA Phase 2 is expected to have additional export capacity of 12 Mtpa of LNG.

Development of LNG export facilities is subject to a number of risks and uncertainties, including obtaining binding customer commitments, required regulatory approvals and permits, securing financing, completing the required commercial agreements and other factors, as well as reaching a final investment decision. The ultimate participation by Total remains subject to finalization of definitive agreements, among other factors.

As MRC informed previously, in April 2015, Total announced that its proposed new ethane cracker near its refinery in Port Arthur, Texas, is being designed to have a capacity of 1 million tpy.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.

UK to introduce plastic packaging tax by 2022

MOSCOW (MRC) -- The UK government is planning to introduce a new tax on all plastic packaging that does not include at least 30% recycled content, as per Plasticsnewseurope.

Presenting his autumn 2018 budget on 29 Oct, Chancellor Philip Hammond said the government aimed to enforce the tax as of April 2022 to give businesses “time to adjust their behaviour and manage any costs they face”. The new tax will work “hand in hand” with a reformed Packaging Producer Responsibility System (PPRS), which will aim to make businesses more responsible for the clean-up and recycling costs of their packaging.

Plans for the new PPRS system, with the objective to encourage designing and using plastic packaging that is easier to recycle, will be announced later this year.

The government is set to launch consultations on both reforms “in the coming months”. According to Hammond, future revenues from the packaging tax and packaging producer responsibility reforms will go towards investments to address single-use plastics, waste and litter.

“The tax will provide a clear economic incentive for businesses to use recycled material in the production of packaging which in turn will create greater demand for this material,” said Hammond.

The chancellor went on to say that the so-called ‘Latte Levy’, which would introduce a 25p levy on disposable coffee cups, was off the table at this point as it was not “effective in encouraging widespread reuse”.

The budget also announced the allocation of GDP20m (EUR22.4m) to tackle plastic wastes and boost recycling, including a GBP10m (EUR11.2m) fund for more plastics R&D and GBP10m for exploring new approaches to boost recycling, such as smartbins.

Commenting on the budget announcement, Wood Mackenzie head of PET Philip Marshall said the packaging tax would face a number of obstacles.

According to Marshall, recyclate viability is already proving difficult to increase and then reuse, due to the challenging nature of collection.

"If there is a greater demand placed on recyclate used within packaging production, due to today's [29 Oct] proposed tax, the cost of said packaging is likely to rise in the short-to-medium term,” he added.

Additionally, there are technical difficulties to overcome.

Progress continues at LyondellBasell La Porte complex

MOSCOW (MRC) -- The La Porte Complex of LyondellBasell, one of the largest plastics, chemicals and refining companies in the world, has announced key pieces of equipment, including a multi-zone circulating reactor, extruder and gas phase reactor have all been successfully installed at its new Hyperzone polyethylene (PE) plant, currently under construction, as per Hydrocarbonprocessing.

"We are about 18 months into construction and our team has safely achieved several key milestones," said Chris Cain, LyondellBasell La Porte site manager. "It has been phenomenal watching the progress of this project that is unlike any other in our company and speaks to the talent, capability and innovation of our employees."

Among the key equipment installed since the start of construction in May 2017 are two reactors, the heaviest of which is a gas phase reactor weighing more than 500 tons. The second reactor, a 200-foot-tall multi-zone circulating reactor, is exclusively designed for the Hyperzone PE technology. Teams have also safely installed a 146-foot-tall flushing silo for ensuring polymer particles are dry prior to extruding them into pellets and laid nearly 19 miles of pipe and 38 miles of wire/cable.

As modeled by Impact Data Source, the USD725 million project will have a capacity of 1.1 billion pounds each year of high density polyethylene and is expected to generate more than USD67 million in tax benefits for the state, county, school district, community college and other local taxing districts over a 10-year period following construction. Additionally, the project will create up to more than 1,000 jobs at the peak of construction and 75 permanent positions.

"The Hyperzone PE plant is bringing growth and jobs to our area," said La Porte Mayor Louis Rigby. "Strong corporate partners like LyondellBasell who continually invest in our city are key to improving opportunities and quality of life for our residents."

LyondellBasell chose to build the new plant at its existing La Porte Complex because of its proximity to price-advantaged US feedstocks and the transportation infrastructure needed to ship product to markets across the globe.

In the past six years, the company has announced USD5 billion of investments to expand and build new manufacturing facilities in the US, including the construction of Hyperzone PE and the world’s largest propylene oxide (PO) and tertiary butyl alcohol (TBA) plant, co-located at its Channelview and Bayport facilities.

Hyperzone PE is the first commercial plant of its kind and the next evolution in polyethylene technology for the plastics industry. The technology, which provides enhanced material performance that will help create lighter weight products that are still stronger and more durable, took years to advance to commercialization and was a product of LyondellBasell’s global research and development teams in Ferrara, Italy; Frankfurt, Germany; Cincinnati, Ohio; and Houston, Texas.

As MRC wrote before, in August 2016, LyondellBasell made the final investment decision to build anew HDPE plant on the US Gulf Coast. The plant will have an annual capacity of 1.1 billion pounds (500,000 metric tons) and will be the first commercial plant to employ LyondellBasell's new proprietary Hyperzone PE technology.

LyondellBasell is one of the world's largest plastics, chemical and refining companies. The company manufactures products at 57 sites in 18 countries. LyondellBasell products and technologies are used to make items that improve the quality of life for people around the world including packaging, electronics, automotive parts, home furnishings, construction materials and biofuels.

European plastics association offers to help “finetune” EMF's new plastic commitment

MOSCOW (MRC) -- The European Plastics Converters Association (EuPC) has welcomed a recent initiative by the Ellen MacArthur Foundation aimed at making packaging more environmentally-friendly - but at the same time has also offered to help “finetune” it, as per Plasticsnewseurope.

Representing 50.000 SMEs, EuPC said in a 30 Oct statement that it was ready to offer its expertise to improve the global commitment which, the association noted somewhat acerbically, had been drafted “only by a few individuals without consulting the plastics converting industry.” Hence, while acknowledging the need to tackle marine litter EuPC said it regrets that it cannot actively participate in, what it termed, 'this exercise’.

The EMF initiative, launched as the New Plastics Economy Global Commitment, was announced during the 2018 Our Ocean Conference, held in Bali, Indonesia, 29-30 Oct.

The pledge aims to create a new scenario for plastic packaging by eliminating single-use packaging materials, increasing the amount of reused or recycled plastics in new products and promoting innovation to ensure 100% of plastic packaging can be reused, recycled, or composted by 2025.

The commitment also includes moving away from “problematic” packaging and using significantly more recycled plastic in packaging itself.

“We believe that together, plastics converters are the best placed industry to define the vision for our industry in a sustainable world, with well performing waste collection systems and more circular designed products,” EuPC said.

Another point of regret, said EuPC, was the fact that the commitment had failed to attract the countries where the plastic problem was the biggest and educational campaigns were needed.

November prices of European PVC dropped slightly for CIS markets

MOSOCW (MRC) -- Negotiations over European polyvinyl chloride (PVC) prices for November shipments to the CIS markets have begun this week. Most European producers slightly reduced their export prices amid lower ethylene prices, according to ICIS-MRC Price report.

The November contract price of ethylene was agreed down by EUR10/tonne from October, which led to a reduction of around EUR5/tonne in PVC production costs. However, prices of resin for shipments to the CIS markets fell by EUR5-10/tonne amid weak demand from a number of export markets.

Demand for PVC remained weak from the main consumers from the CIS countries due to seasonal factors and stable operations of local producers.

Despite the ongoing scheduled shutdowns at some European plants, most producers did not have major restrictions on exports.

Negotiations over November shipments of suspension polyvinyl chloride (SPVC) to the CIS markets were held in the range of EUR715-780/tonne FCA, whereas deals were done in the range of EUR720-790/tonne FCA a month earlier.