Sabic raises stake to 75% in Saudi Methanol Co

MOSCOW (MRC) -- Sabic said it signed an agreement with the Japan Saudi Arabia Methanol Company (JSMC) to raise its stake in renew the JV partnership in Saudi Methanol Company (Ar-Razi) for another 20 years, as per Pipeline Oil&Gas News.

JSMC will pay more than 5 billion Saudi riyals to Sabic for renewing the joint venture partnership, which Sabic will use, in part or whole, to finance refurbishment of Ar-Razi’s existing methanol plants or set up new ones, Sabic said in a statement.

Under the agreement, which was approved by regulatory bodies, Sabic will raise its stake in Ar-Razi to 75%, reducing JSMC’s shareholding in Ar-Razi to 25 percent. Sabic will also become an equal co-owner with JSMC.

"Ar-Razi is the first joint venture in Sabic's history and one of the most successful partnerships that the company has had over 40 years," said Yousef Al-Benyan, Sabic vice chairman and CEO.

"Renewing the partnership for more 20 years is proof of its success and contribution to the Saudi-Japan strategic cooperation, in line with Vision 2030," he added.

Ar-Razi was set up in 1979, as a 50/50 joint venture between Sabic and JSMC with the aim of developing, establishing, owning and operating a methanol complex.

As MRC informed before, in February 2018, in response to customer needs, Sabic announced projects in Asia and the Netherlands designed to increase global capacity for two of its high-performance engineering thermoplastic materials, Ultem and Noryl resins. The planned new production facility in Singapore is expected to go online in the first half of 2021. The company also plans to recommission operations at its Bergen op Zoom PPE resin plant in the Netherlands by the end of 2019 to produce polyphenylene ether (PPE), the base resin for its line of Noryl resins and oligomers.

Saudi Basic Industries Corporation (Sabic) ranks among the world's top petrochemical companies. The company is among the worldпїЅs market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.

Philadelphia Energy Solutions seeks to permanently shut oil refinery

MOSCOW (MRC) -- Philadelphia Energy Solutions (PES) will seek to permanently shut its oil refinery in the city after a massive fire caused substantial damage to the complex, reported Reuters with reference to the mayor's confirmation.

"I spoke with the CEO and leadership of Philadelphia Energy Solutions this morning and can confirm that PES intends to shut down the refinery within the next month," Philadelphia Mayor Jim Kenney said in a statement.

"I’m extremely disappointed for the more than one thousand workers who will be immediately impacted by this closure, as well as other businesses that are dependent on the refinery operations," Kenney said.

Shutting the refinery, the largest and oldest on the US East Coast, would cost hundreds of jobs and squeeze gasoline supplies in the busiest, most densely populated corridor of the United States.

The refinery is expected to begin layoffs of the 700 union workers as early as Wednesday, according to two sources familiar with the plans. They said employees have been instructed to immediately begin the process of mothballing units, shutting them indefinitely.

About 100 non-union employees will be laid off immediately, with a "significant" number of the 700 union employees expected to lose their jobs in mid-July, the sources said.

The 335,000 barrel-per-day (bpd) complex, located in a densely populated area in the southern part of the city, erupted in flames in the early hours on Friday, in a series of explosions that could be heard miles away.

PES is expected to file a notice of intent with state and federal regulators as early as Wednesday, the sources said, which would start the closure process. A spokesperson for Philadelphia Energy Solutions on Tuesday night declined to comment.

"The impact of the closure will be a massive blow to the local economy," said Ryan O’Callaghan, head of the refinery’s union, estimating that it would cost tens of thousands of jobs when contractors and other businesses that rely on the plant are included.

The cause of the fire was unknown as of Tuesday, though city fire officials said it started in a butane vat around 4 a.m. (0800 GMT). It destroyed a 30,000-bpd alkylation unit that uses hydrofluoric acid to process refined products. Had the acid caught fire, it could have resulted in a vapor cloud that can damage the skin, eyes and lungs of nearby residents.

Before the fire, the refinery had struggled financially for years, forced to slash worker benefits and scale back capital projects to save cash. It went through a bankruptcy process last year to reduce debt, but cash on hand dwindled even after it emerged from bankruptcy in August.

After bankruptcy, Credit Suisse Asset Management and Bardin Hill became the controlling owners, with former primary owners Carlyle Group and Sunoco Logistics, an Energy Transfer subsidiary, holding a minority stake.

Workers were picking up large debris out of nearby waterways on Monday, according to pictures seen by Reuters, while other pictures showed the charred remains of control rooms and burned components.

The blaze was the second in two weeks at the complex, spurring the mayor to call for a task force to look into the cause and community outreach in the wake of the incidents. That task force will now be retooled to focus on helping the company transition the site of the refinery and supporting employees affected, Kenney said in his statement.

Investigators on the scene are dealing with unstable structures that need to be certified by engineers, slowing down the inquiry, city officials said. The investigation could ultimately take months or perhaps years, they said.

The state Department of Environmental Protection said on Tuesday it was concerned about the integrity of storage tanks on site. The US Chemical Safety Board is also investigating the incident.

AkzoNobel sells former paint factory in UK

MOSCOW (MRC) -- AkzoNobel has sold its former paint factory located in Wexham Road, Slough, UK. The site comprises both the former Slough Manufacturing Unit and AkzoNobel’s Research and Development facility, said the company.

Paint production ceased on the site in 2016 and operations were relocated to AkzoNobel’s state-of-the-art facility in Ashington, UK. The Research and Development facility is being leased by AkzoNobel for a short time until relocated.

The AkzoNobel UK headquarters and Dulux Academy, located to the west of Wexham Road, are not included as part of the sale and continue to be actively used by AkzoNobel.

This transaction generated proceeds of EUR75 million and will be reported in the financial results for the second quarter of 2019 as a one-off gain of EUR57 million, included within identified items.

As MRC informed earlier, AkzoNobel said it is in discussions with BASF to acquire BASF’s industrial coatings business. BASF confirmed that it is in discussions with AkzoNobel on the potential sale, but also declined to give further information. BASF is relatively small in industrial coatings.

Akzo Nobel N.V., trading as AkzoNobel, is a Dutch multinational, active in the fields of decorative paints, performance coatings and specialty chemicals. Headquartered in Amsterdam, the company has activities in more than 80 countries, and employs approximately 55,000 people.

INEOS Oxide announces Chocolate Bayou as the location for its new EO investment in the USA.

MOSCOW (MRC) -- INEOS Oxide confirms its new 1.2 billion lb (circa 520 kt) Ethylene Oxide (EO) unit and associated downstream Ethylene Oxide Derivatives (EOD) is to be built at INEOS’ Chocolate Bayou manufacturing works south of Houston on the Gulf of Mexico coast, said the company.

Chocolate Bayou is currently host to two Olefins crackers, two Polypropylene units and two Cogen facilities operated by INEOS O&P USA. A new Linear Alpha Olefins unit and associated downstream Poly Alpha Olefins unit are also currently under construction at the site by INEOS Oligomers.

The selection of Chocolate Bayou to host the new EO & EOD facility will reinforce on-site integration to the benefit of both the crackers and the derivative assets. The availability of additional land close to the unit will also enable interested third-parties to co-locate and consume EO by pipeline.

As MRC informed earlier, Ineos Oxide announced that following a detailed study it is moving forward with the next stage of its project to construct an Ethylene Oxide (EO) and Ethylene Oxide Derivatives (EOD) facility on the U.S. Gulf Coast. It is planned that the asset will be operational in 2022.

Banks scramble to re-pitch for Aramco IPO roles: sources

MOSCOW (MRC) -- Investment banks are scrambling to re-pitch to advise Saudi Aramco on a possible initial public offering, sources familiar with the matter said, with Saudi Arabia’s energy minister confirming plans for the listing to proceed in 2020 or 2021, as per Hydrocarbonprocessing.

“Bankers previously involved in the IPO are pushing for meetings with Aramco,” one of the sources said. “There is some shifting in terms of what roles the banks might have if IPO talks go ahead.” JPMorgan, Morgan Stanley and HSBC were picked to play a leading role in the world’s biggest ever IPO when the plan was first announced in 2016. Boutique investment banks Moelis & Co and Evercore were also hired by Aramco as independent advisers. But plans for a domestic and international listing were later postponed.

The Saudi energy minister Khalid al-Falih, who also chairs Aramco, said on Tuesday the company was ready to start working on the long-awaited listing, adding it could happen in 2020-2021. “The IPO process was never fully suspended,” al-Falih said.

“We have always been clear that the IPO will happen in the 2020-2021 timeframe. We have never stopped talking about the IPO.” Al-Falih pointed to Aramco’s USD69.1 billion acquisition of a 70 percent stake in petrochemicals firm Saudi Basic Industries (SABIC) along with a recent USD12 billion bonds sale as the main reason for the IPO delay.

“Now that all of these issues have been cleared, we are ready to start planning for the IPO,” he said. Al-Falih confirmed the same timeline that Saudi Arabia’s Crown Prince Mohammed bin Salman, known as MbS, provided on June 16 when he said the government remained fully committed to the IPO project, expecting it to take place between 2020 and early 2021.

MbS’s comments triggered a series of approaches by international investment banks who wanted to be in the driving seat, one of the sources said. The IPO is a centerpiece of the crown prince’s plan to diversify the kingdom’s economy beyond oil.

“It is a catch 22 situation,” another source said. “After the statement by the Crown Prince, banks have been rushing to Aramco to pitch." As part of their client coverage, investment banks frequently discuss listing options with Aramco, but no formal IPO process is underway, a third source said.

Bloomberg earlier reported on Tuesday that Saudi Aramco recently held talks with a group of investment banks to discuss roles in its potential initial public offering, citing people familiar with the matter.