Lotte Chemical USA starts commercial operations at new ethane cracker and MEG plant in USA

MOSCOW (MRC) -- Lotte Chemical Titan Holding (Kuala Lumpur, Malaysia), an affiliate of Lotte Chemical (Seoul, South Korea), has announced that the group's ethane cracker and ethylene glycol (EG) plant at Lake Charles, Louisiana, commenced commercial operations in August, reported Chemweek.

Lotte Chemical USA, a 40/60 joint venture (JV) between Lotte Chemical Titan and Lotte Chemical, holds the Lotte group's stakes in the plants.

The USD3.1-billion ethane cracker is an 88/12 JV between Lotte Chemical USA and Axiall, a subsidiary of Westlake Chemical. Lotte has invested about USD1.9 billion in the JV. Lotte Chemical USA owns 100% of the EG plant.

The USD1.1-billion EG plant has a production capacity of 700,000 metric tons/year. According to data from IHS Markit, Lotte will also produce diethylene glycol, with a capacity of 65,000 metric tons/year; triethylene glycol, 7,000 metric tons/year; and ethylene oxide (EO), 500,000 metric tons/year, at the 250-acre Lake Charles site. The cracker has capacity for 1 million metric tons/year (MMt/y) of ethylene.

Lotte will offtake approximately 50% of the ethylene for the EG plant and Axiall will take roughly 10%, in line with their shareholdings. Lotte will sell the remaining 40% of the ethylene output to Axiall for that company's use. The Lake Charles EG unit is thought to be the largest in the US.

Lotte says that ethane derived from locally produced shale gas is used as feedstock at the cracker. The company says it intends to reduce its overall dependence on naphtha and increase the use of shale gas through full operation of the Lake Charles plant. This would mitigate the risk from oil-price fluctuations and stabilize cost competitiveness, Lotte says.

Industry analysts say that the US project will likely lift Lotte Chemical's annual sales and operating profit by 1 trillion South Korean won and W200 billion, respectively. The company reported second-quarter net profit down 53.2% year on year (YOY) to W271 billion (USD224.8 million), on sales of W4 trillion, down 6.8% YOY.

Lotte is the first South Korean petrochemical company to enter the ethane-cracking business in North America using shale gas. Lotte Chemical operates naphtha crackers at Yeosu and Daesan, South Korea, and Lotte Chemical Titan operates a cracker at Pasir Gudang, Malaysia. Lotte says that the US cracker increases the group's overall ethylene capacity to 4.5 MMt/y, making it the seventh-biggest producer of ethylene worldwide.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,255,800 tonnes in the first seven months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.
MRC

Repsol declares FM for products shipped from its cracker in Portugal

MOSCOW (MRC) -- Spanish energy group Repsol has issued a force majeure on petrochemicals supplies out of its steam cracker unit in Sines, Portugal, according to S&P Global with reference to a company spokesperson.

"A technical problem has forced us to declare force majeure in all our base petrochemicals. We are currently carrying out all actions to minimize the impact of this situation, hoping to restore production as soon as possible," the spokesperson said.

It was unclear when the force majeure was declared and how long it would remain in place.

The steam cracker produces 410,000 mt/year of ethylene and 215,000 mt/year of propylene. At the site, the company also has a butadiene unit, with total capacity of 45,000 mt/year.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,255,800 tonnes in the first seven months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Repsol S.A. is an energy company based in Madrid, Spain. It carries out upstream and downstream activities throughout the entire world. It has more than 24,000 employees worldwide. It is vertically integrated and operates in all areas of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

LDPE imports to Ukraine down by 1.5% in Jan-Jul 2019

MOSCOW (MRC) -- Overall imports of low density polyethylene (LDPE) into the Ukrainian market decreased in the first seven months of 2019 by 1.5% year on year to 45,400 tonne, as per MRC's DataScope report.

This figure was at 46,100 tonnes in January-July 2019.

At the same time, in July 2019, LDPE imports grew by 40.3%, exceeding 8,000 tonnes, compared to 5,700 tonnes a month earlier. Imports jumped during the stated month because of the concerns about the introduction of special duties from 1 August. Thus, some companies significantly increased their shipments from Russia.
MRC

Nizhnekamskneftekhim raises September PS prices by Rb2,000/tonne for Russian market

MOSCOW (MRC) -- Nizhnekamskneftekhim (part of the TAIF group) has increased its September selling prices of high impact polystyrene (HIPS) and general purpose polystyrene (GPPS) by Rb2,000/tonne for most Russian buyers, according to ICIS-MRC Price report.

However, some market participants reported a roll-over of prices. But all the interviewed largest buyers reported this month's price increase.

Amid the deficit of polystyrene (PS), selling prices of a number of sellers rose by more than Rb2,000/tonne.

Thus, September prices of Nizhnekamskneftekhim's GPPS for injection moulding and extrusion were in the range of Rb90,500-95,500/tonne CPT Moscow, including VAT, and for foaming - at Rb88,500-93,000/tonne CPT Moscow, including VAT, whereas HIPS prices were at Rb95,500-100,500/tonne CPT Moscow, including VAT.

PJSC "Nizhnekamskneftekhim" (NKNK) - one of the largest Russian manufacturers of petrochemical products. The industrial complex of the company includes ten major production plants and ten departments (Railway Transport, Ethylene trunk, etc..). NKNKh produces more than 120 types of chemical products, including synthetic rubber, polyethylene, polypropylene, polystyrene, surfactants. Nizhnekamskneftekhim is a member of TAIF Group of Companies.
MRC

Major petrochemical companies form Cracker of the Future Consortium and sign R&D agreement

MOSCOW (MRC) -- Six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) have announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels, as per Borealis' press release.

The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies have agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

Base chemicals, which include ethylene, propylene, butadiene and BTX (benzene, toluene, xylenes), are produced in steam crackers and mainly transformed into plastics. These are used for lightweight components in vehicles, improving passenger safety and comfort and reducing fuel and emissions. Plastic packaging saves and preserves food from field to table. Overall, polymers make a major contribution to resource and energy efficiency and positively impact society.

Polymers will always be needed, especially in emerging, renewable energy-related technologies, where they are crucial, for instance for wind turbines, solar panels and batteries. The chemical industry has been at the forefront of those innovations and will continue to deliver solutions for a more sustainable future.

Steam crackers represent the principal opportunity for reducing the industry’s greenhouse gas emissions. One option currently under consideration is to electrically heat the cracking furnaces, rather than rely on fossil fuels.

Using electricity produced from renewable sources would significantly reduce cracker emissions. The key challenges in developing electricity-based cracker technology are ensuring that the chosen emissions reduction solution is technologically and economically feasible compared to the current process; that it fits into a future low-carbon value chain; and that it can be implemented in time to meet policy targets. Assuming these challenges are met, developing and implementing electricity-based cracker technology will help the sector maintain sustainable operations while reducing the carbon footprint of its products.

Following the signature of the agreement, the members of the consortium have begun exploring and screening technical options. If a potential technical solution is identified, the parties will determine whether to pursue joint development project(s), including R&D activities that could include a demonstrator for proof of concept in the case of base chemicals.

The collaboration is a direct result of the Trilateral Strategy for the Chemical Industry drawn up by the North Rhine-Westphalian, Flemish and Dutch ministries of economic affairs and the industry associations VCI (Germany), Essenscia (Belgium) and VNCI (Netherlands) to boost the sustainability of the chemical sector. The Trilateral Strategy to "become the world'?s engine for the transition towards a sustainable and competitive chemical industry cluster" was presented to the European Commission in late 2017. Three tables have been set up to elaborate strategy: Energy, Infrastructure and Innovation.

The Innovation Table has three key success factors: technical innovations to enable the energy and feedstock transition, digital transformation to enhance competitiveness, and framework conditions to enhance innovation through cross-border cooperation.

The trilateral region of the Netherlands, North Rhine-Westphalia and Flanders was a logical choice as a European starting point, since the combined region is the largest chemical cluster in the world with annual revenue of EUR180 billion and 350,000 jobs.

The six members of the Cracker of the Future Consortium, chaired by the Brightlands Chemelot Campus (Geleen, the Netherlands), aim to create innovative value propositions in developing sustainable technologies together in line with competition law.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,255,800 tonnes in the first seven months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.
MRC