Westlake Chemical Partners acquires 4.50% stake in Westlake Chemical OpCo

MOSCOW (MRC) -- Westlake Chemical Partners has agreed to acquire an additional 4.50% limited partner interest in Westlake Chemical OpCo on a fully diluted basis for approximately USD201.4M, as per TheFly.

The purchase price for the acquisition represents an enterprise value multiple of approximately 10.5x of OpCo's expected 2019 EBITDA.

The Partnership intends to finance the acquisition with borrowings under its revolving credit facility and the proceeds of a private placement of 2,940,818 common units representing limited partner interests of the Partnership to certain institutional investors and an entity for the benefit of certain family members of Albert Chao and James Chao, each of whom serve on the board of directors of Westlake Chemical Partners.

The private placement will result in gross proceeds of approximately USD62.9M. The acquisition is expected to close on March 29 and be immediately accretive to the Partnership's MLP distributable cash flow. The acquisition will increase the Partnership's limited partner interest in OpCo from approximately 18.3% to approximately 22.8%.

OpCo sells approximately 95% of its ethylene production to Westlake Chemical Corporation under a long-term supply agreement.

The acquisition and the affiliate entity's participation were approved by a Conflicts Committee, which is composed entirely of independent directors of the Board.

As MRC informed before, in early 2018, Westlake Chemical Corporation announced that it will expand capacities for the production of polyvinyl chloride (PVC) and vinyl chloride monomer (VCM) at three of its chemical facilities. Two of the plants are located in Germany (Burghausen, Gendorf) and one is located in Geismar, Louisiana. The expansions in Burghausen and Geismar are expected to be completed in 2019. The Gendorf expansions are expected to be completed in 2020 and 2021.

Westlake Chemical Corporation is an international manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, chlor-alkali and derivative products, PVC suspension and specialty resins, PVC Compounds, and PVC building products including siding, pipe, fittings and specialty components, windows, fence, deck and film.

US crude stockpiles rise unexpectedly as exports slow

MOSCOW (MRC) -- US crude oil stocks rose unexpectedly last week after a fire disrupted movements on the Houston Ship Channel and slowed exports, while gasoline and distillate inventories fell more than forecast, reported Hydrocarbonprocessing with reference the Energy Information Administration.

Crude inventories rose by 2.8 million barrels in the week to March 22, compared with analysts' expectations for a decrease of 1.2 million barrels.

Crude stocks at the Cushing, Oklahoma, delivery hub rose 541,000 barrels, the EIA said.

Net US crude imports rose last week by 114,000 barrels per day as exports alone fell 506,000 bpd.

"The report was bearish relative to expectations, as crude inventories rose, due, in part, to a steep drop in exports week-on-week," said Phil Flynn, an analyst at Price Futures Group in Chicago.

The draw on refined products inventories did not completely offset the bearish crude data, he said.

US crude futures extended losses after the data was released, and Brent crude briefly turned negative. US crude was down 11 cents at USD59.83 a barrel by 11:01 a.m. EDT (1501 GMT), while Brent up 8 cents at USD68.04 a barrel.

A storage tank fire on March 18 at Intercontinental Terminals Co Deer Park facility on the Houston Ship Channel led to restrictions on shipping at the busiest US energy port.

"The tank fire caused a lot of problems in the ship channel with benzene and other chemicals slipping into the water and the Coast Guard shut down ship movement for a couple of days," said Donald Morton, who runs an energy trading desk at investment banking firm H.J. Sims & Co. "It was a very short-term situation that will get better quickly and already has started getting better," he said.

Refinery crude runs fell by 367,000 bpd, the EIA data showed. Refinery utilization rates fell by 2.3 percentage points.

Gasoline stocks fell by 2.9 million barrels, a slightly greater draw than analysts expected in a Reuters poll that called for a 2.8 million-barrel drop.

Distillate stockpiles, which include diesel and heating oil, fell by 2.1 million barrels, versus expectations for a 896,000-barrel drop, the EIA data showed.

LyondellBasell refinery production still 14% below capacity

MOSCOW (MRC) -- Lyondell Basell Industries Houston refinery's production continues to run at about 14% below its 263,776 barrel-per-day capacity due to shipping limitations on the Houston Ship Channel, reported Reuters with reference to Hysaid Gulf Coast market sources.

The lack of shipping prevents Lyondell from removing sulfur made as a byproduct of gasoline production at the refinery, the sources said. The refinery has limited storage capacity on-site.

As MRC wrote previously, in September 2016, LyondellBasell selected its La Porte, Texas, manufacturing complex as the site for a new high density polyethylene (HDPE) plant. The plant will be the first commercial plant to employ LyondellBasell's new proprietary Hyperzone PE technology and will have an annual capacity of 1.1 billion pounds (500,000 metric tons). Construction began in early 2017 with start-up planned for 2019.

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. LyondellBasell sells products into approximately 100 countries and is the world's largest licensor of polyolefin technologies.

Arkema opens first PEKK production plant in US

MOSCOW (MRC) -- French speciality chemicals supplier Arkema SA has started up a poly-ether-ketone-ketone (PEKK) production plant at its existing site near Mobile, Alabama, where it already produces acrylic polymers and plastics additives, said Plasticsnewseurope.

The move follows Arkema’s doubling of its PEKK resin capacities in France in 2017 and supports the strong demand for carbon fibre-reinforced composites and 3D materials, the company said 25 March.

The company statement did not provide further details on the investment size or production capacity of the plant. Sold under the brand name Kepstan, Arkem’as PEKK is the latest addition to the PAEK (poly-aryl-ether-ketone) family.

The material, according to the French company, “significantly increases” the number of applications suitable for very high-performance polymers by offering a wider range of processing techniques and thermo-mechanical properties.

Applications include in aeronautics, oil & gas, electronics and automotive industries, where lightweight materials are increasingly in demand.

The polymer range also features “excellent mechanical, chemical, fire and abrasion resistance”, making it suitable particularly for 3D printing, Arkema added.

"This new capacity… will enable our customers and their customers to better meet the future demand for ever more efficient materials," said Christophe Andre, vice president, advanced materials for Arkema.

Phillips 66 contains fire at its Los Angeles refinery

MOSCOW (MRC) -- Phillips 66 said it had contained a fire at its Los Angeles refinery. Officials said there were no injuries during the incident, as per Hydrocarbonprocessing.

Phillips 66 said the fire occurred at the Carson facility, which is part of the Phillips 66 Los Angeles Refinery. The cause of the fire is still under investigation.

The refinery processes mainly heavy, high-sulfur crude oil, according to the company’s website.

A plume of thick black smoke was visible when the facility was ablaze, however, the company said that the community air monitoring readings have shown no offsite impact.

Separately, the Los Angeles County Fire Department told Reuters that there are no known casualties and no evacuations.

As MRC wrote previously, US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.