US probe cites "ineffective" safeguard in Husky oil refinery blast

MOSCOW (MRC) -- An “ineffective” safeguard failed to prevent an explosive mixing of air and fuel at a Husky Energy refinery in Superior, Wisconsin, leading to a blast and fire in the plant’s gasoline-producing unit in April, a US industrial safety group said, reported Reuters.

Air seeped through a hole in a valve within a fluidic catalytic cracking unit (FCCU), the US Chemical Safety Board (CSB) said, causing an April 26 explosion that led to a massive fire and a 24-hour-long evacuation of residents living within miles of the plant.

The board said 36 people sought medical treatment after the blast, including 11 working at the refinery. The plant was undergoing maintenance at the time.

Air seeped through a hole in a valve within a fluidic catalytic cracking unit (FCCU), the US Chemical Safety Board (CSB) said, causing an April 26 explosion that led to a massive fire and a 24-hour-long evacuation of residents living within miles of the plant.

The board said 36 people sought medical treatment after the blast, including 11 working at the refinery. The plant was undergoing maintenance at the time.

Husky, according to the CSB, had only considered a failure of the valve when locked open, not a failure when it was closed, according to an updated report the board presented of its months-long investigation at a meeting Wednesday in Superior.

The failures leading to the Superior refinery explosion were similar to those that caused a 2015 explosion in an FCCU at a Torrance, California, refinery then owned by Exxon Mobil Corp. Exxon sold the refinery to PBF Energy in 2016.

"Prior to both incidents, the process hazard analyses identified scenarios in which hydrocarbons flowed into the air side of the FCCU and vice versa due to a failure of the spent catalyst slide valve (SCSV), but the safeguards listed to protect against those scenarios were ineffective," the board said.

The CSB, created by the US Clean Air Act, has no regulatory or enforcement authority but is charged with determining the causes of chemical plant explosions and fires and making recommendations to government and industry.

"Given the similarities between these two incidents, the CSB will be examining areas of further improvement that need tobe taken by industry," the board said.

FCCUs use a fine, silica catalyst in high heat to make gasoline from gas oil and the passage of the sand-like catalyst over the slide valve at the Superior refinery wore a hole in it.

A mixture of air and hydrocarbon within the unit can easily find an ignition source in the 1,300 degree Fahrenheit (715 Celsius) operating temperature of the FCCU.

The Husky refinery was shut after the April explosion. Husky expects to restart production at the plant in 2020.

Most CSB investigations take up to a year to complete.

As MRC informed previously, Canadian oil and gas producer Husky Energy Inc said this autumn it had made an unsolicited bid to acquire rival MEG Energy Corp in a deal valued at USD5 billion including debt. The combined company would have total production of more than 410,000 barrels of oil equivalent per day (boepd) and refining and upgrading capacity of about 400,000 barrels per day (bpd).

Global specialty chemicals company Perstorp to sell its Capa business to Ingevity

MOSCOW (MRC) -- Perstorp, a global leader in specialty chemicals, has announced it has agreed to sell Capa, its caprolactone business, including the production site in Warrington, to Ingevity for approximately EUR590 million, as per the company's press release.

The business has annual revenues of approximately EUR150 million.

Under Perstorp’s leadership during the last 10 years, Capa’s operating margins have increased by almost 50% by investing in production and new product lines, which in turn have increased both the customer base and the geographic reach. This has made Capa a highly attractive asset, gaining interest among several potential buyers of which Ingevity now will be the new owner to continue to develop the long-term value of the business. Ingevity will acquire Perstorp UK Ltd including Perstorp’s entire caprolactone business.

The sale of Capa will unlock significant value and is in line with Perstorp’s track record of successful divestments such as most recently the BioFuels Business and in 2017, the Belgian site in Gent.

It will furthermore enable the Perstorp Group to focus its business opportunities and future growth prospects on its Polyol, Oxo and Feed businesses, maximizing opportunities such as:

- further building leadership in the polyol business;
- expand the markets for phthalate free plasticizer Pevalen;
- expand the markets for products within the animal nutrition area;
- establishing its pro-environment solutions as the first choice (certified products based on renewable raw materials.

Jan Secher, President and CEO of Perstorp, commented: "We have a strong track record in delivering optimum value from our businesses. Capa is an excellent proof of this and where the business will continue to have a bright future. This sale realizes the significant value of the asset, simplifies Perstorp Group, strengthens our balance sheet and allows us to focus our future investment and innovation in attractive high growth segments. Our strategy remains to leverage Perstorp’s superior positions and expertise in chemistry and engineering to drive innovation and provide our customers with solutions that advance everyday life."

The transaction is subject to certain regulatory approvals and other customary closing conditions, and Perstorp expects to close the transaction in the first quarter of 2019.

HSBC Bank plc acted as financial adviser and Allen & Overy acted as legal counsel to Perstorp.

As MRC wrote previously, in December 2017, Perstorp announced world’s first portfolio of renewable alternatives to the essential polyols Pentaerythritol (Penta), Trimethylolpropane (TMP), and Neopentyl glycol (Neo). The product portfolio will be globally launched at China Coat. The launch is a response to the fast growing global need for more sustainable Coatings, Resins and Synthetic Lubricants to mention a few. This means that Perstorp is the only chemical company in the world to offer all three essential polyols Penta, TMP and Neo in both traditional and renewable forms.

Perstorp is one of the world leaders in various sectors of the specialty chemicals market, it's pioneer in formalin chemistry, plastics and surface materials. Perstorp was founded in 1881 and is controlled by PAI partners,a major European private equity company. The company has around 1,500 employees in with 22 production plants in Europe, Asia and North America.

Neftekhim LTD resumed PP production after unscheduled shutdown

MOSCOW (MRC) -- Neftekhim Ltd, Kazakhstan's only polypropylene (PP) producer, has resumed its PP production after the forced shutdown in late November, according to ICIS-MRC Price report.

The plant's customers said the Kazakh producer had resumed PP production by 12 December after the forced outage, which started in late November. The shutdown was caused by technical issues at Pavlodar refinery, leading to suspension of shipments of feedstock for the PP production.

Neftekhim Ltd was commissioned in 2009. The company produces methyl tertiary butyl ether (MTBE) and polypropylene (PP). The plant's PP production with the capacity of 30,000 tonnes/year was launched in 2011; the plant did not have PP granulation unit then, polymer was produced in the form of powder, which limited its field of application.

Indorama Ventures announces acquisition of UTT

MOSCOW (MRC) -- Indorama Ventures Public Company Limited (IVL), a leading global chemical company, has announced that it has entered into an agreement to acquire UTT Beteiligungsgesellschaft mbH, as per the company's press release.

UTT is one of the leading suppliers of airbag fabrics and other highly specialized solutions in the field of technical textiles. The company has two sites in Germany and Mexico with approximately 420 employees and produces around 70 million sqm of fabrics.

Subject to regulatory approvals, UTT will be acquired by PHP Fibers, a company owned by Indorama Ventures (80% stake) and Toyobo (20% stake). The acquisition of UTT by PHP Fibers brings together two pioneers in the airbag market who have worked together closely and trustingly for more than five decades. With this acquisition, Indorama Ventures is strengthening its portfolio in the airbag sector and adds the UTT weaving sites in Germany and Mexico to the yarn production sites in Germany, the USA and the JV participation in China as well as to the PHP Fibers weaving mills in Germany and the USA established with the expertise of Toyobo.

The combination of both companies will form a leading integrated manufacturer of airbag yarns and textiles globally to offering wider choices to its customers in a more cost efficient manner.

Aloke Lohia, Group CEO of Indorama Ventures, stressed: "We have known UTT for a long time as a loyal customer of our airbag yarns. The expertise of UTT and the intensified exchange of experience with PHP will advance both companies and further strengthen Indorama Ventures' leading global position in the airbag segment. For the benefit of our customers, we will move even closer to the users in the future in order to be able to respond better and more flexibly to the wishes of our customers, whether for yarns or fabrics.

The acquisition also clearly demonstrates the strategic importance of the Automotive Division for Indorama Ventures. IVL is not only focusing on tire yarns, but also on other trendsetting segments such as airbags."

As MRC reported before, in October 2017, IVL completed its purchase of DuraFiber Technologies Mexico Operations, S. A. DE C. V. (Durafiber). Durafiber is a leading Mexican producer of durable technical textiles for industrial, tyre reinforcement, and specialty applications globally.

Indorama Ventures Public Company Limited, listed in Thailand, is one of the world’s leading petrochemicals producers, with a global manufacturing footprint across Africa, Asia, Europe and North America. The company’s portfolio comprises Necessities and High Value-Added (HVA) categories of Polymers, Fibers, and Packaging, selectively integrated with self-manufactured Ethylene Oxide/Glycols and PTA where economical. IVL products serve major FMCG and Automotive sectors, i.e. Beverages, Hygiene, Personal Care, Tire and Safety segments. IVL has approx. 15,000 employees worldwide.

Saudi Aramco, ADNOC's India refinery project delayed by two years

MOSCOW (MRC) -- India has delayed the commissioning of a giant refinery that state-owned firms are building in tie-up with Saudi Aramco and Abu Dhabi National Oil Co (ADNOC) by two year to 2025, a senior official at the consortium told Reuters.

The planned 1.2 million barrels per day (bpd) coastal refinery in western Maharashtra state slated to commission in 2023, according to the website of Ratnagiri Refinery & Petrochemicals Ltd (RRPL), the joint-venture company executing the project.

"The project will be completed in 2024 and commissioning will be in 2025," said RPPL chief executive B. Ashok.

He said the new commissioning schedule has been drawn as the company now has "detailed information on the configuration, availability of the people to build and so on".

According to RPPL website, the USD50 billion refinery and associated petrochemical project would be spread over 15,000 acres of land.

Acquisition of land for the project has been put on hold after a strong opposition from farmers, chief minister of Maharashtra Devendra Fadnavis said last month.

Land acquisition has always been a contentious issue in rural India, where the majority of the population depends on farming for their livelihood.

The refinery, which was initially expected to cost USD44 billion, was seen as a game changer - offering India steady fuel supplies and meeting Saudi Arabia and ADNOC’s need to secure regular buyers for its oil.

But thousands of farmers are refusing to surrender land, fearing it could damage a region famed for its Alphonso mangoes, vast cashew plantations and fishing hamlets that boast bountiful catches of seafood.

Ashok said the project would have a very high complexity to churn out superior grade fuels and 18 million tonnes/year of petrochemicals.

State run companies - Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum - own 50 percent stake in RPPL while the remainder is held by Saudi Aramco and ADNOC.

As MRC informed earlier, a USD3.1 billion project to introduce crude processing flexibility, at the ADNOC owned Ruwais oil refinery, was announced in February 2018.