SMC plans maintenance at Methanol plant

MOSCOW (MRC) -- Salalah Methanol Co (SMC) is likely to shut its methanol plant for turnaround, according to Apic-online.

A Polymerupdate source in Oman informed that the company has planned to undertake maintenance at the plant on August 23, 2019. The Plant is expected to remain under maintenance for around 18-20 days.

Located in Salalah, Oman, the plant has a production capacity of 1.3 million mt/year.

As MRC wrote previously, SMC took off-stream its methanol plant in in Salalah for maintenance in early-April 2018. The plant remained under maintenance for around 6 weeks.

Refinery expands diesel unit

MOSCOW (MRC) -- The 180,000 barrels per day Zeeland refinery in the Netherlands said in a statement it is expanding its diesel-producing hydrocracker unit with a third reactor, said Hydrocarbonprocessing.

The new unit arrived on July 18 and will be connected to the existing plant in 2020, the refinery said in a statement on its website.

The plant is owned by Total (TOTF.PA) and Russia’s Lukoil (LKOH.MM). The firms invested 40 million euros (?36.64 million) in the new unit, the statement said.

The addition is part of a global drive to increase diesel production ahead of a major change in marine fuel standards next year that requires vessel to use lower-sulphur fuels.

As MRC informed earlier, McDermott International, Inc. announced it has been awarded a significant contract by LUKOIL NizhegorodNefteorgSyntez, a subsidiary of JSC LUKOIL, for the engineering, procurement and construction (EPC) of the Delayed Coker Unit for the Deep Conversion Complex planned to be built in Kstovo, Russia.

EPA chief defends biofuel waivers in meeting with farm senators

MOSCOW (MRC) -- The head of the U.S. Environmental Protection Agency defended his agency’s expanded use of waivers exempting refineries from the country’s biofuel law during a closed-door meeting with farm state senators last week, arguing the program has had no negative impact on ethanol demand, according to four sources with knowledge of the meeting, said Hydrocarbonprocessing.

EPA Administrator Andrew Wheeler’s comments are a sign he may resist an overhaul of the so-called Small Refinery Exemption program, which President Donald Trump last month ordered members of his Cabinet to review based on complaints from the corn lobby. The EPA and the U.S. Department of Agriculture are preparing to hold a cabinet-level meeting on the issue as soon as this week, two of the same sources said.

Under the U.S. Renewable Fuel Standard, refineries must blend corn-based ethanol into their gasoline or buy credits from those that do – a policy meant to help farmers and cut U.S. petroleum imports. But small facilities can secure exemptions from the program if they can prove to the EPA that complying would cause them financial hardship.

Since Trump took office, the EPA has more than quadrupled the number of waivers it has granted to refineries, saving the oil industry hundreds of millions of dollars, but enraging farmers who claim the move threatens demand for one of their staple products. Refiners dismiss the argument, saying ethanol demand has not been impacted.

Wheeler echoed the refining industry’s point of view in his meeting last Wednesday with the senators from corn-producing states, which included powerful Republican Chuck Grassley from Iowa, according to the four sources, who asked not to be named.

“We understand Wheeler has made a case that ethanol industry was not hurt by the small refinery waivers,” said one of the sources, an industry official with knowledge of the meeting. Another source said Wheeler attributed the reason behind weak ethanol demand as falling gasoline consumption, not the waiver program.

The EPA said in a statement emailed to Reuters that it “continues to implement the Renewable Fuel Standard program in accordance with the Clean Air Act, taking into consideration additional direction from Congress, recommendations from Department of Energy, and relevant court decisions."

It did not comment on the meeting. Renewable fuel (D6) credits for 2019 traded as low as 20 cents each on Tuesday, losing four cents from the previous session following this Reuters report on the meeting, traders said.

The waiver program has been a source of contention between the rivaling corn and oil industries for years now, but the tug of war between the groups has intensified in recent months, underscoring the rising political importance of the RFS policy.

Industry sources told Reuters in recent weeks that decisions on some 40 outstanding waiver applications, covering the 2018 compliance year, were nearly finalized before Trump intervened and demanded the review. Since then, the USDA and EPA have been in talks on how to redesign the waiver program but so far, no definitive solution has emerged.

During a visit to a refinery in Pennsylvania on Tuesday, Wheeler said the agency was still processing them and was hoping to make decisions within the next few weeks, or at most a month.

Some refiners say they filed their applications far earlier than April, and say the EPA is already late. Past waivers have gone to small refineries owned by giants like Exxon Mobil and Chevron Corp, along with a facility owned by billionaire investor Carl Icahn, according to a report by Reuters. That has raised accusations from the corn lobby that the EPA is misusing the program meant to protect the smallest fuel facilities from going bust.

Fire at Toledo, Ohio refinery extinguished

MOSCOW (MRC) -- PBF Energy said a fire at its 172,800-barrels-per-day refinery in Toledo, Ohio, was extinguished by the emergency response team, said Reuters.

A crude unit at the refinery has been affected by a “line failure”, and will be shut for a couple of weeks, said a source familiar with the plant operations.

Only one of the two crude distillation units at the refinery is affected, added another source.

No injuries were reported and cause of the fire will be investigated, the company said.

As MRC informed earlier, PBF Energy restarted the 50,000 bpd coking unit at its Delaware City, Delaware, refinery in mid-April after roughly six weeks of planned work. The unit, which helps make gasoline and diesel, was shut around March 3 for planned work.

Clariant suffers another setback as JV talks with SABIC collapse

MOSCOW (MRC) -- Clariant said last Thursday that joint venture talks with top shareholder Saudi Basic Industries (SABIC) had been shelved due to differences over asset prices, a further setback for the Swiss chemicals maker whose CEO abruptly quit last week, reported Reuters.

Shares in Clariant plunged 11% as the company also announced a first-half loss, hit by charges linked to a European probe over competitive practices.

Clariant and SABIC, which has a 25% stake in the Swiss group, had been working to combine Clariant's additives and specialty masterbatches businesses - including colours, additives and special effect concentrates for plastics used for products such as packaging - with parts of SABIC's specialty chemicals operation. They had hoped to create an operation with 3.1 billion Swiss francs (USD3.14 billion) in annual sales controlled by the Swiss company.

Clariant's CFO Patrick Jany told an analysts' call that the company would now have to rework its strategic plan drafted in September 2018, since it can no longer count on the joint venture with SABIC boosting growth, helping cut costs and lifting profits.

Market conditions left an agreement on how much Clariant would pay for the SABIC assets out of reach, Jany told Reuters.

"From the sellers' side, it wouldn't make sense for them, they probably would receive less proceeds than they expected," Jany told Reuters. "And for us, it doesn't make sense, because we would probably have to, in our view, pay too much for the business."

Even before the JV flopped, Clariant had been in upheaval, announcing last Wednesday that CEO Ernesto Occhiello, who joined from SABIC just 10 months ago, was resigning with immediate effect.

Shares in Clariant have now fallen 13% since Occhiello quit last Wednesday.

Clariant Chairman Hariolf Kottmann told Thursday's analysts' call that Ochiello had a "personal and private reason" for leaving the company that was unrelated to the stalled SABIC joint venture talks.

Clariant said it would now look to sell its specialty masterbatches business along with standard masterbatches that were already on the auction block.

It previously said it expected to reap 1 billion-2 billion francs from asset sales.

It now expects more, but declined to give a figure, with the cash destined for technology investments, eliminating debt and to shareholders.

"Our assessment is, there's more value-creation in selling masterbatches as a whole, rather than splitting it," Jany said.

Analysts said the about-face raised questions about Clariant's future.

"What a mess!" Baader Helvea chemicals analyst Markus Mayer said in a note, adding he sees Clariant increasingly as a takeover target.

"SABIC has an interest to fully take over Clariant. With the resignation of CEO Occhiello, who came from SABIC, and the termination of the JV negotiations, we think it is just a matter of time SABIC will come up with a takeover offer."

Jany said SABIC has not given any signals on changing its current stake.

With a market capitalisation of USD88 billion, SABIC is 13 times bigger than USD6.66 billion Clariant.

SABIC said it "looks forward to continuing the discussions with Clariant once conditions improve".

Saudi oil giant Aramco this year reached an agreement with the state-run Public Investment Fund to buy its controlling stake in SABIC for USD69.1 billion.

Mazen al-Sudairi, head of research at Al Rajhi Capital, said market conditions might be a factor for the shelving of the JV, as petrochemical prices are down globally and have hurt sector results.

"Whenever there are any concerns or changes related to the economic cycle, M&A should be put on hold," he said, adding SABIC learned that

SABIC bought its stake in Clariant in 2018, arriving on the scene as a white knight to end the Swiss company's fight with activist investors who had previously blocked the Swiss company's proposed USD20 billion merger with US-based Huntsman Corp.

Clariant last Thursday reported a first-half net loss of 101 million Swiss francs versus a profit of 211 million a year earlier. Sales were steady at 2.2 billion francs.

Profitability fell at two of the three businesses Clariant plans to keep, including soap ingredients and its catalysis business that sells chemicals that help speed up reactions.

The results were affected by a 231 million franc provision Clariant set aside for an ongoing competition law investigation by the European Commission.

"The first half-year 2019 was admittedly challenging," said Kottmann, Occhiello's predecessor as chief executive who has assumed his responsibilities until a successor is found.

Kottmann said he hoped to name a permanent replacement by the end of 2019 or early 2020.

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.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.