Real estate developer in USD240 M deal to buy Philadelphia refinery

MOSCOW (MRC) -- Real estate developer Hilco Redevelopment Partners has entered into a USD240 million agreement to purchase the Philadelphia Energy Solutions oil refinery, which was the largest and oldest on the East Coast, according to court documents, said Hydrocarbonprocessing.

Chicago-based Hilco submitted the winning bid, which includes an escrow amount of USD30 million, in an auction last week for the Philadelphia site, documents filed with the U.S. Bankruptcy Court for the District of Delaware show. The sale still needs to be approved by the bankruptcy court, and Los Angeles-based developer Industrial Realty Group, LLC, was selected as the backup bidder, the documents show.

The plan is scheduled to be submitted to the court for approval on Feb. 6. PES filed for bankruptcy on July 21 and put its 335,000-barrel-per-day plant up for sale a month after a fire and explosions destroyed part of the refinery. With PES’s closure, more than 1,000 workers were laid off, including 640 local United Steelworkers members.

Hilco, which has acquired 5,000 acres (2,023 hectares) in North America, specializes in redeveloping obsolete industrial sites, dimming the prospect that the PES complex will be revived as an oil refinery.

Philadelphia Mayor Jim Kenney said in a statement that while the city expects challenges and years of work ahead, it is optimistic Hilco will develop the more than 1,300-acre site in a way that is more environmentally friendly and contributes to the regional economy.

"We welcome the selection of Hilco Redevelopment Partners as the winning bidder for the refinery site," Kenney said. City officials met with bidders during last week’s auction and were briefed on the track records of the various parties, but they were not given specific details of the proposals.

Hilco did not respond to requests for comment on its plans for the South Philadelphia site, which has been used to store and process hydrocarbons for about 150 years.

However, a stakeholder who was briefed by Hilco representatives in the days leading up to the auction said the company intended to use part of the site for light industrial purposes, including storage.

More than a dozen groups showed initial interest in buying PES, but only one publicly stated intentions to revive the site as an oil refinery at full capacity.

A sale to a real estate developer, either Hilco or IRG, does not preclude former bidders from leasing space on the site, according to two sources familiar with other proposals for PES.

As MRC informed earlier, Philadelphia Energy Solutions (PES) filed for Chapter 11 bankruptcy protection, the company said, its second such filing in less than two years, after a fire last month prompted it to close the largest refinery on the US East Coast.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.
MRC

PES creditors fight to reject refinery sale

MOSCOW (MRC) -- Creditors of bankrupt Philadelphia Energy Solutions are opposing the sale of its oil refinery to Hilco Redevelopment Partners, saying another developer made a more lucrative bid for the site, reported Reuters with reference to court documents filed.

Industrial Realty Group submitted a bid of USD265 million during an auction last week to sell the idled refinery site, $25 million more than Hilco’s bid, according to filings by law firm Brown Rudnick LLP in United States Bankruptcy Court for the District of Delaware.

PES did not immediately respond to a request for comment.

The refiner announced on Wednesday that it agreed to sell its 335,000 barrel-per-day refinery, the largest and oldest on the US East Coast, to Chicago-based real estate developer Hilco, naming Industrial Realty Group as a back-up bidder.

PES’s unsecured creditors, which include companies that had supplied contract work to PES, as well as workers’ unions employed by the refinery, have pushed for a buyer that would restart the complex.

Hilco’s proposal for the more-than 1,300-acre (530-hectare) site would result in a permanent shutdown of the plant, Brown Rudnick said, leaving those contractors and union members out of work.

The attorneys did not say whether Industrial Realty Group intended to revive any or all of the idled refining complex, which shut over the summer after a June fire destroyed one of its key fuel processing units. PES filed for Chapter 11 bankruptcy in July.

PES’s bankruptcy plan, which includes the Hilco agreement, is scheduled to be submitted for court approval on Feb. 6. PES creditors will also vote on whether they approve of the plan.

If creditors reject the plan, that would put pressure on PES to prove its bankruptcy proposal is the best option for paying back creditors, the court filing said.

PES’s unsecured creditors also took issue with other elements of the plan, including bonuses for refinery executives and that it fails to resolve a USD1.25 billion insurance dispute.

As MRC wrote before, the bankrupt Philadelphia Energy Solutions is to sell its fire-damaged refinery site to real estate developer Hilco Redevelopment Partners.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.
MRC

Johns Manville to build polyiso products plant in Texas

MOSCOW (MRC) --Johns Manville plans to build a polyisocyanurate (polyiso) products facility in Hillsboro, south of Dallas, Texas, as per Financialpost.

“We take great pride in creating and delivering the best products for our customers,” said Mary Rhinehart, President and CEO of Johns Manville. “This expansion south of Dallas/Fort Worth, in an area where construction is surging, will increase availability of our premium products to customers throughout the region."

JM will begin construction on the new production facility later this year, pending various government approvals, and anticipates the completion in mid-2021. When complete, JM will employ more than 50 people at the new facility.

"There are tremendous growth opportunities in the Southwest for polyiso products,” said Joe Smith, President of JM’s Roofing Systems business. “Three of the 10 largest cities in the country are a short drive from Hillsboro, and some of our largest roofing contractors are located within the service area."

The Hillsboro plant will manufacture polyiso products including ENRGY 3® roof insulation, ProtectoR® HD high density cover board, AP Foil Faced Foam sheathing and GoBoard® tile backer. These polyiso products are preferred in the market due to their high R-value per inch and the lightweight strength and durability they offer for several building applications.

The Hillsboro facility will also include a JM roofing distribution center. The warehouse will stock many JM products, including TPO and TPO accessories, to help JM meet local demand.

"We are excited to build in an area close to our customers and where we can hire good people into the JM family to help our customers be successful,” said Matt Sayer, Polyiso and Boards Product Manager for JM. “Johns Manville will be well-positioned with this expansion to increase product supply to meet the growing demand from our customers."

Local officials welcomed JM’s decision to expand in Hillsboro.

As MRC informed earlier, Russia's output of chemical products dropped by 3.2% in November 2019 month on month.
However, production of basic chemicals increased by 3.6% in the first eleven months of 2019, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, the largest increase in production volumes on an annualized basis accounted for mineral fertilizers and polymers in primary form. Last month, 255,000 tonnes of ethylene were produced versus 210,000 tonnes in October; by November, Russian producers had completed all their scheduled works. Thus, 2,721,000 tonnes of this olefin were produced in January-November 2019, up by 0.3% year on year.

Johns Manville, a Berkshire Hathaway company, is a leading manufacturer and marketer of premium-quality building and specialty products. In business since 1858, the Denver-based company has annual sales over USD3 billion and holds leadership positions in all of the key markets that it serves. Johns Manville employs 8,000 people and operates 46 manufacturing facilities in North America, Europe and China.
MRC

Taiwanese CPC to Invest USD22B for petrochemical plant

MOSCOW (MRC) -- Taiwanese state-owned oil refiner CPC Corp. is committed to investing USD22 billion for the development of the Balongan petrochemical refinery, reported InsiderStories with reference to the senior minister's statement.

In 2018, the company and Indonesia’s oil and gas holding PT Pertamina has signed a USD6.49 billion framework agreement for the project.

"Later Pertamina will not be too active and have a large portion in the development of the Balongan petrochemical refinery. The CPC will be active in the production, processing, and marketing of petrochemical products," Coordinating Minister for Maritime and Investment Affairs Luhut Binsar Pandjaitan told reporters at his office.

The cooperation between Pertamina and CPC is carried out in the form of the construction of a global-scale naphtha cracker plant and a global petrochemical downstream development unit in Indonesia, Pandjaitan said.

"CPC’s appointment is not without reason. CPC has been known as one of the leading companies in the international petrochemical industry. The company is expected to be an entry point for Pertamina to compete," the minister revealed.

The Indonesian operator is committed to diversifying its business into new and renewable energy segments as support for the government program for an energy mix that targets new and renewable energy portions of 25 percent by 2025, the minister adds.

Later the naphtha cracker plant is expected to produce at least one million tons of ethylene per year and build a downstream unit that will produce other refined derivative products to meet the needs of the world industry, especially in Indonesia.

Several stages of refinery construction that must be carried out this year include completing a pre-feasibility study (FS), then starting a bankable feasibility study (BFS), environmental impact assessment (EIA) and land reclamation. The refinery is expected to start operating in 2026, Pandjaitan said.

Currently, Pertamina‘s petrochemical processing capacity is only 700 kilotons per annum (ktpa). However, its capacity will increase gradually as the refinery megaproject is completed consisting of two new refineries includes Tuban and Bontang, and four revitalized refineries such as Balikpapan, Cilacap, Balongan, and Dumai.

"In 2026, we will be able to produce around 6,600 ktpa of petrochemical products," the minister said, adding the country spends USD3 billion per year to import oil and gas which is almost 70 percent of the country’s national needs.

Previously, the Abu Dhabi National Oil Company (ADNOC) has signed a deal with Pertamina for oil and gas collaboration in both countries. As a part of the deal, which is estimated to be worth USD2.5 billion, the two companies will collaborate to build a liquefied petroleum gas (LPG) storage facility in Indonesia.

Indonesia spends USD3 billion per year to import LPG which is almost 70 percent of the country’s national needs. Last year, Indonesia suffered a trade deficit of USD500 million in its trade with the United Arab Emirates (UAE). While the country’s imports from the UAE were worth USD2 billion, its exports stood at USD1.5 billion.

As MRC informed before, on 8 November 2019, CPC Corporation took one of its naphtha crackers off-stream for major maintenance work. The cracker number 4 was expected to remain offline for about 65 days. The No. 4 unit has an annual capacity of 380,000 tons/year of ethylene and 193,000 tons/year of propylene. The shutdown would result in a production loss of 67,671 tons of ethylene and 34,370 tons of propylene.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.

CPC Corporation, Taiwan, is engaged in the exploration, production, refining, procurement, transportation, storage, and marketing of oil and gas. The company provides fuel oil, including automotive unleaded gasoline and diesel fuel, low-sulfur fuel oil, marine distillate fuels, marine residual fuels, and aviation fuel; petrochemicals, such as ethylene, propylene, butadiene, benzene, para-xylene, and ortho-xylene; liquefied petroleum gas products comprising liquefied petroleum gas, propane, butane, and a propane/butane mixture; lubricants, motor oil, industrial oil, grease, and marilube oil; SNC products, including petroleum ether, naphtha, toluene, xylene, crude octene, methyl alcohol, normal paraffin, viscosity-graded asphalt cement, and sulfur; and natural gas.
MRC

Celanese ethylene-based VAM technology listed as green technology by China Petroleum and Chemical Industry Federation

MOSCOW (MRC) -- Celanese Corporation, a global chemical and specialty materials company, has announced that its ethylene-based VAM technology has been awarded the designation as a "Green Technology" in China for its low carbon emissions, low energy consumption, low content of heavy components and high product quality, as per the company's press release.

The designation was announced recently at a press event in Beijing by the China Petroleum and Chemical Industry Federation (CPCIF) in the Directory for Petrochemical Green Technology (2019 edition).

Harvey Zhao, senior director of Celanese’s Asia Acetyls business, was invited to attend the press event and award ceremony. As a representative of one of the awarded companies, Zhao delivered a speech on behalf of Celanese and introduced the ethylene-based VAM technology and shared the company’s continuous efforts towards safety and environmental protection. Zhao commented: "Celanese will continue to adhere to our business principles of sustainable product development and will work together with local governments and associations and actively participate in related activities to further contribute to China’s green development."

Celanese is one of the major global producers of ethylene-based VAM (vinyl acetate monomer) that is advancing this green technology used in the production of polymer emulsions of various types, which are base resins for water-based paints, adhesives, paper coatings and textile finishes. VAM can be polymerized in mass, solution, suspension or emulsion.

The Directory for Petrochemical Green Technology was organized, evaluated and compiled by CPCIF under the support and guidance of the National Development and Reform Commission and the Ministry of the Industry and Information Technology of the People’s Republic of China in 2018. It not only provides guidance for technology selection for new investment and promoting development and application of green technologies, but also plays a positive role in guiding the government and financial institutions in making policies. There are a total of 23 such technologies listed in the Directory. The 2019 revised edition will further contribute to the "Green Petrochemical Industry" in China.

As MRC reported earlier, Celanese raised its January VAM prices in Europe, Middle East and Africa by EUR100/mt.

According to MRC's DataScope report, November EVA imports to Russia dropped by 8,9% year on year to 3,440 tonnes from 3,780 tonnes in November 2018, and overall imports of this grade of ethylene copolymer into the Russian Federation decreased in January-November 2019 by 18,9% year on year to 35,95 tonnes (44,330 tonnes in the first eleven months of 2018).

Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Based in Dallas, Celanese employs approximately 7,700 employees worldwide and had 2018 net sales of USD7.2 billion.
MRC