Karpatneftekhim resumes HDPE and PVC production

MOSCOW (MRC) -- Karpatneftekhim (Kalush, Ivano-Frankivsk region), Ukraine's largest petrochemical plant, resumed its polyvinyl chloride (PVC) production after the shutdown for maintenance. The plant's high density polyethylene (HDPE) production is next in turn to be launched, according to ICIS-MRC Price report.

The plant's clients said the scheduled turnaround at HDPE and PVC production capacities started on 5 November was quite long. Karpatneftekhim had resumed its PVC production by 7 December, the start-up of its HDPE production began on Monday, 10 December.

This was virtually the first shutdown for maintenance after a period of more than a year of the plant's operations.

As reported earlier, Karpatneftekhim resumed operations on 9 June 2017, after a five-year outage.

Karpatneftekhim is one of the largest enterprises of Ukraine's petrochemical complex. Currently, the plant can produce annually 300,000 tonnes of PVC, 200,000 tonnes of caustic soda, about 180,000 tonnes of chlorine, as well as 250,000 tonnes of ethylene and 100,000 tonnes of polyethylene.

December prices of European PE dropped for CIS countries

MOSCOW (MRC) -- The December contract price of ethylene was agreed in Europe down by EUR110/tonne from November. However, European producers were ready to reduce their export polyethylene (PE) prices for this month's shipments to the CIS markets, but not proportionally to the amount of the decrease in monomer prices, according to ICIS-MRC Price report.

Negotiations over December PE shipments from Europe to the CIS countries began last Monday. A reduction of EUR110/tonne in the contract price of ethylene in the region suggests a similar decrease in the cost of PE production. However, despite the situation in the monomer market, European producers were trying to prevent a reduction in export PE prices for this month's shipments to the CIS countries by more than EUR70/tonne.

Thus, negotiations over December high density polyethylene (HDPE) shipments were held in the range of EUR1,020-1,095/tonne FCA, down by an average of EUR50-70/tonne from November. Some producers still had restrictions on exports.

December deals for European low density polyethylene (LDPE) were discussed in the range EUR980-1,035/tonne FCA, whereas last month's deals were done in the range of EUR1,020-1,080/tonne FCA.

Sipchem and Sahara enter binding merger agreement

MOSCOW (MRC) -- Saudi International Petrochemical Company (Sipchem) and Sahara Petrochemical Company has announced that they have entered into a legally binding agreement for a business merger, as per TradeArabia.

Sipchem and Sahara said they propose to implement a business merger of equals by way of Sipchem making a recommended offer to acquire all of the issued shares in Sahara in exchange for the issue of new shares in Sipchem in accordance with the applicable rules and regulations of the Capital Market Authority (CMA).

Under the terms of the deal, Sipchem will issue for every one Sahara share 0.8356 new Sipchem shares. Based on the exchange ratio, the total consideration payable by Sipchem to Sahara shareholders will be the issue of 366,666,666 new Sipchem shares.

The deal is valued at SR8.25 billion (USD2.2 billion) and the merger is expected to create an SR16 billion chemicals company. Both Sipchem and Sahara have the Zamil Group, one of the kingdom’s most prominent family businesses, as a significant shareholder, along with the Saudi Arabian government.

Upon completion of the transaction, all of the Sahara shares will be delisted from the Tadawul and Sahara will become a wholly-owned subsidiary of Sipchem.

The companies had entered into a non-binding memorandum of understanding on merger on October 3, 2018.

Assuming the transaction and the capital increase are approved by Sipchem shareholders at the Sipchem EGA and the transaction is approved by the Sahara Shareholders at the Sahara EGA and that all the other conditions are satisfied (or, where appropriate, waived), Sahara shareholders will hold 50 per cent of the enlarged issued share capital of Sipchem (being the aggregate of the issued share capital of Sipchem as at the date of this firm intention announcement and the new Sipchem shares to be issued to Sahara shareholders), the Sipchem statement said.

The transaction will result in Sipchem having an increased share capital of 733,333,332 Sipchem shares, of which 366,666,666 Sipchem shares, representing 50 per cent of Sipchem’s increased share capital, will be held by Sahara shareholders and 366,666,666 Sipchem shares, representing 50 per cent of Sipchem’s increased share capital, will be held by Sipchem shareholders, it said.

The exchange ratio and the resulting ownership split has been agreed as a result of an extensive mutual due diligence and valuation exercise, it added.

The merger is expected to provide synergy potential, from both a revenue and cost
perspective, which is expected to drive value for shareholders. It is also expected to deliver benefits to the combined workforce, and local and international business partners.

The chief executive officer of the combined group will be Engineer Ahmed Al-Ohali, who is currently the CEO of Sipchem. The chief operating officer will be Engineer Saleh Bahamdan, who is currently the CEO of Sahara.

The registered office of the combined group shall be located in Riyadh, Saudi Arabia at Al Ma’athar District, King Fahad Branch Road, Cairo Square, Almashariq Tower.

The name of the combined group shall be changed to "Sahara International Petrochemical Company (Sipchem).

As MRC wrote before, in March 2018, Sipchem said it was planning to resume proposed merger talks with Sahara Petrochemical in a deal that could create a 14.7 billion riyals (USD3.9 bln) chemicals company. The two companies called off a planned merger in 2014, citing an inadequate regulatory framework in the kingdom for the collapse.

Established in 1999, Saudi International Petrochemical Company (Sipchem) manufactures and markets methanol, butanediol, tetrahydrofuran, acetic acid, acetic anhydride, vinyl acetate monomer. Besides, it has launched several down-stream projects to manufacture ethylene vinyl acetate, low density polyethylene, ethyl acetate, butyl acetate, cross linkable polyethylene, and semi conductive compound that are scheduled to start in 2013.

Sahara Petrochemical is involved in building and operating petrochemical projects, especially propylene, polypropylene, ethylene and mixed polyethylene industries.

PetroChina begins work on third phase of Rudong LNG terminal expansion

MOSCOW (MRC) -- State-controlled oil and gas producer PetroChina has officially started construction works on the third phase of the expansion project at its Rudong LNG import terminal in Jiangsu province, as per LNGWorldNews.

The third phase which started on November 26 includes the addition of two 200,000-cbm LNG storage tanks, according to a statement by CNPC, the parent company of PetroChina.

After the completion of the expansion project in 2021, the LNG facility will have three 160,000-cbm and three 200,000-cbm LNG tanks with total capacity of some 1.08 million cbm, the statement said.

The terminal, which started operations in 2011, has an annual regasification capacity of 6.5 million tonnes of LNG.

According to the CNPC statement, Rudong terminal handled 75 LNG ships or 5.75 million tonnes in the January-November period, the highest in its history.

As MRC informed previously, in January 2018, PetroChina nearly doubled the amount of Russian crude being processed at its refinery in Dalian, the company’s biggest, since January, as a new supply agreement had come into effect. The Dalian Petrochemical Corp, located in the northeast port city of Dalian, is expected to process 13 million tonnes, or 260,000 bpd of Russian pipeline crude this year, up by about 85 to 90 percent from last year’s level.

PetroChina has designated three refineries in northeast China - Dalian, Liaoyang and Jilin - as the main receiving points for the increased Russian supply. Liaoyang will begin taking more crude once a major upgrade is completed at the end of this year. The new volumes will flow as a result of Russia and China expanding the East Siberian Pacific Ocean pipeline that starts at Rosneft’s oilfields in East Siberia and enters China at border town of Mohe.

BASF starts production of its fungicide innovation Revysol

MOSCOW (MRC) – BASF has started production of its latest fungicide innovation Revysol at its site in Hannibal. With this new active ingredient, BASF will provide farmers worldwide with a new tool to ensure healthy, disease-free crops for a longer period of time and will strengthen its leading position in fungicides, said the company.

Revysol is the first fungicide to be produced at the site in Hannibal. Pending regulatory approval, first market introductions are expected for the 2019/2020 season.

"We are pleased with the successful start of production in Hannibal. It is a significant milestone towards bringing this highly-effective fungicide to our customers,” said Markus Heldt, President of BASF’s Agricultural Solutions division. With an investment in the double-digit million euro range, BASF has enhanced an existing manufacturing system to produce the new active ingredient.

Locating the world’s first production site for Revysol in the United States emphasizes the strategic importance of this new fungicide to North American markets. “We are proud that Hannibal is the first site to produce Revysol,” said Anne Berg, Vice President Manufacturing Americas, BASF’s Agricultural Solutions division.

"This decision was based on the high level of technology and experience on the site and is an investment in its future development that will save and create new jobs."

Revysol is expected to become BASF’s new blockbuster fungicide. It has the potential of reaching peak sales above EUR1 billion. BASF has applied for registration of Revysol in 60 countries across Europe, Asia and the Americas for more than 40 crops. The proprietary compound was designed to meet the high level of regulatory standards while demonstrating an outstanding performance and selectivity in a broad range of row and specialty crops. Farmers will benefit from its fast-acting and long-lasting disease control resulting in improved farm management. Revysol will be available in customized formulations to farmers across the globe and enable them to better protect their crops under various growing conditions.